Blanket MortgageBlanket Mortgage: A mortgage that is secured by two or more properties. Suppose you want to buy a house plus the vacant lot next door, financing the purchase with a single home mortgage loan instead of two is a savings. Also, by combining the house and lot, the lot can be financed on better terms than if it were financed separately, as mortgage lenders more readily loan on a house and land than on land alone. Note, however, if the vacant lot is later sold separately from the house before the mortgage loan is fully repaid, it will be necessary to have it released from the blanket. This is usually accomplished by including a release clause in the original mortgage agreement that specifies how much of the loan must be repaid before the lot can be released. |