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The Power of Blanket / Inter Alia Mortgages

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Inter Alia Mortgage Definition

The term “inter alia” attached to a mortgage simply comes from the Latin phrase for “among other things,” and it refers to a type of loan in which the lender is not satisfied with the property that is being pledged as security for a mortgage. In order to gain approval for the loan, you may have to attach another property as more security. When you go to closing, you only fill out one set of papers, but a mortgage document goes into execution and registration for each property that becomes security.

Inter Alia Mortgage Meaning

There are two cases in which inter alia mortgages are commonly used. The first involves a client selling a home that he owns and free and clear while also buying a new house. The property for sale is added as a linked asset to get a better mortgage interest rate on the new home at the lowest possible cost. However, once the first house sells, that part of the loan is discharged, and the only charge that is registered going forward is the loan for the new home. The second involves private mortgage situations in which clients were struggling with debt to income ratio, poor credit rating or trying to purchase a type of property that traditional lenders really did not want to work with. In the first situation, this is considered “bridge” finance as a client tries to move from one dwelling to another for the least amount possible in terms of financing costs. The second situation has become more common with the proliferation of more rules governing the granting of mortgage loans. The rise of private lenders has come about as more and more home buyers are looking for alternate forms of financing to get into the homes of their dreams. They have the money to make a larger down payment, and they will either be able to pay off the loan more quickly (within a couple of years instead of 30) or they will be able to qualify for a traditional mortgage within a couple of years and satisfy the private loan.

Inter Alia Mortgage Loans

However, Amansad Financial has helped many clients use blanket or inter alia mortgages in a variety of other situations. One example has been to help clients secure more property. If you are looking to grow your real estate investment holdings, sometimes you might identify a property that you can fix up and flip at a profit, but the bank appraiser is not convinced that the property is worth what you think you can bring in with the amount you have planned to spend on improvements. Often, adding another property to the note as far as security will make the bank happy and give you the leeway you need to improve the property and turn the profit around. Also, if you are looking at purchase multiple properties at the same time, having an inter alia mortgage loan for the entire group involves less paperwork and regulatory hassle than applying for a separate loan for each property.

If you are looking to group properties from more than one province into your inter alia loan, there are some lenders who look askance, but others who are willing to consider it. Amansad Financial has relationships with several lenders who will work with inter-province cases, so if you are having a difficult time with this, one of our customer service representatives can connect you with several prospective lenders.

Another case in which blanket or inter-alia mortgage can be helpful is for the real estate investor who already owns several properties. However, for one reason or another, one property has fallen behind in payments (perhaps the tenant moved out and the property has remained vacant, or the owner has run into financial difficulties in other area and has stopped making payments on this property), or one property suddenly needs significant renovations, it can be difficult to come with the kind of cash needed to remedy that situation quickly. An inter alia loan can take some or all of the real estate investor’s property as security and provide the sort of funding that the client needs.

There are many creative ways to gain the sort of financing that our clients need, and Amansad Financial has the resources and the connections to help our clients get into the property that they want. Talk to one of our specialists today!

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Daniel K. Akowuah | Mortgage Professional / DLG Underwriter
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