The Power Of A Blanket Mortgage In Canada
If you’re a Canadian resident dealing with large expenses and bruised credit, you might be looking for financial solutions to manage your properties better. One of the options that is broadly talked about is securing a loan against two properties at the same time.
Most homeowners are used to the traditional mortgage when buying their home or cottage – securing financing against one property. However, if you own multiple properties, it may make sense to explore other options that will be more financially beneficial. This article will explain what a blanket mortgage is, its availability in Canada, how you can use multiple properties to obtain one, and how the payments work.
What is the Meaning of a Blanket Mortgage?
A blanket mortgage is a single mortgage that covers two or more properties under one loan. This is easier for you as a borrower Instead of having separate mortgages for each property, a blanket mortgage consolidates them into one single mortgage. This type of mortgage is especially helpful for real estate investors, property developers, and homeowners who own multiple properties. It reduces the stress of property management, offers better interest rates compared to having two separate mortgages, and better mortgage terms.
Is a Blanket Mortgage Available in Canada?
In Canada, blanket mortgages are offered but are not as common as the traditional mortgage loan. They are offered more commonly by private mortgage lenders but are always considered on a case-by-case basis amongst banks, credit unions and other institutional mortgage lenders.
These mortgages are designed to offer flexibility and convenience for property owners who own multiple homes with equity in them. However, they are not as common as traditional mortgages, so you may need to work with specialized lenders or mortgage brokers to find the right product for your needs.
Can I Use Two Properties to Get a Blanket Mortgage?
That’s the idea. One of the main benefits of a blanket mortgage is the ability to use two or more properties as collateral for the loan. This is extremely helpful if you have equity in one or more of the homes you own. By utilizing the value and equity in more than one property, you might be able to access more funds and even benefit from better mortgage terms than if just one single property. If you need access to more money this strategy can come in handy and enables you to manage expenses, pay down debt, or invest in further property improvements.
Get a Home Equity Loan Against Two Properties
A blanket mortgage can also function similarly to a home equity loan but with multiple properties. By leveraging the equity in your properties, you can secure a loan even if you have an existing mortgage registered on one or more of the properties you own. This can come in handy if you’re dealing with larger expenses or need funds for renovations, debt consolidation, or improving your cash flow. If your existing mortgage(s) has more favourable terms then it might make sense to get a secondary home equity loan. Combining the value of both properties strengthens your borrowing power and approval terms.
How Do the Payments Work?
Payments for a blanket mortgage are no different than traditional mortgage loans. You will make one monthly payment that covers the total mortgage amount for all the properties included in the blanket mortgage. The single payment offers you the ability to streamline your financial management by reducing or eliminating the need to keep records for multiple mortgage payments each month. However, it’s crucial to ensure you have a reliable income source and a sound financial plan, as missing payments can put all your properties at risk. Consider consulting an accountant who can provide valuable guidance in managing your finances and securing your investments.
Navigating Blanket Mortgages With LendToday
At LendToday, we’ve been helping Canadians who face mortgage challenges for years. We understand the challenges you face and offer solutions that don’t rely solely on your credit score or income. We have a larger lender network that meets the needs of Canadians who don’t fit traditional mortgage lending criteria and need help navigating through their options. If you own multiple properties and need financial assistance, a blanket mortgage could be the right solution for you.
Contact LendToday to explore your options and find a mortgage that fits your needs.
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