Mortgage Blog

The Power of Blanket Mortgage / Inter Alia Mortgage

By May 20, 2014May 25th, 2022No Comments

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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Blanket Mortgage Definition: A blanket mortgage is financing that covers multiple plots of land in a purchase by one borrower. Frequently, land developers will use the blanket mortgage to buy a larger piece of land for the purpose of splitting it into numerous separate parcels for development or resale. Instead of having to mortgage each lot independently, a borrower can use a blanket mortgage to cut down on financing costs and boost efficient use of time.

What is a Blanket Mortgage

Homeowners also use blanket mortgage loans to finance the building of a new home. They use the financing to get at the equity in their existing home and use it to pay a new down payment and closing fees for the new dwelling. This blanket loan allows the borrower to finance their new home and begin construction even before the sale of their old house.

Blanket Mortgage Example

In addition to these basic uses of the blanket mortgage loan, Amansad Financial has helped clients make a number of purchases reality that would not have happened if they had been forced to finance each purchase separately. One example is the “flip” purchase. In this case, an investor wants to swoop in, buy a property at a depressed price, make some repairs and renovations, and then turn the property back over and sell it at a cool profit. The time frame on a “flip” is often very fast, sometimes even during the initial pre-closing period but generally within a few months. The purpose of a blanket mortgage is to give these investors, in this case, the ability to access their home equity in order to turn a profit. By taking out the blanket mortgage and then paying it of when they flip the house successfully, these borrowers build a solid relationship with those providing the financing, leading to ongoing financing relationships.

Another common use of the blanket mortgage involves purchasing a second home out in the country. As people decide that they want to add a beach house or a country home as a retreat away from city life, but they lack the funds to pay cash for that house. The purpose of a blanket mortgage is to give borrowers access to the equity they have already built up in their existing home and convert it into leverage supporting a loan for that new house without actually having to take out a second loan. This way, borrowers can get that house in the country that they want.

Blanket Mortgage Requirements

The key in securing a blanket loan is finding the sort of collateral that a lender will find sufficient. The good part about a blanket mortgage in this vein is that the collateral consists of multiple properties. This gives Blanket Mortgage Lenders more reasons to approve the loan, because in the unfortunate event that the loan goes into default, the bank will have multiple assets to seize and sell. Whether a borrower is using this to buy up land, add a second home to his assets or start buying up land as an investment, the more collateral the borrower has on hand, the more financing options a borrower will have with a blanket loan.

For those new to real estate investments, it is important to note that blanket mortgages are not designed to be a long-term solution. After you use the blanket loan to acquire the property you want, make punctual payments for six months to a year, and then approach a traditional lender to refinance the loan over a longer term if you are not ready to satisfy the balance of the loan at the end of that time. For those who are in the position to take on this sort of loan, blanket financing can give you the flexibility you need to turn some significant profits in the real estate market. With prices edging their way up, there is the real possibility that you can find depressed properties and turn them back around to bring in significant profits, even if you have to make significant upgrades to the property.

Apply for a blanket loan

If you are curious about blanket loans and your own real estate situation, get in touch with Amansad Financial to find out the best way to make one of these work for you. The time to strike in the real estate market is now, and Amansad Financial stands ready to help.

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