A Blanket Mortgage, as the name suggests, deals with the financing of a business in order to own one or more portions of property under one loan. This proves to be an absolute factor in saving time and cutting costs (closing costs and other fees), which are otherwise there with single mortgages.
In simpler words, the term 'blanket coverage' is a business insurance policy covering more than one property of the same nature and scope. For instance, a franchise owner who has 5 ice cream stores across the city is eligible to pick a single insurance policy that covers all of the locations. Blanket insurance is also meant to safeguard the non-real estate property such as personal property, intellectual art work and mortgage investments.
The advantages of choosing mortgage insurance for a business:
The best example here can be the real estate industry. Imagine a real estate developer who is on the search for a mortgage for 3 properties which he is planning to build and sell. Now he has two options - either go for separate mortgages for each property or obtain blanket mortgage insurance for all the properties in one single insurance deal. Needless to say, the latter one is a more efficient and cost-effective choice.
The advantages of choosing mortgage insurance for an individual:
A homeowner or an individual businessman can benefit from a blanket mortgage policy as well. For instance, if any individual plans to buy a new house, keeping the existing one with him/her, he/she can at any time go for a blanket insurance policy to continue paying on the existing home loan and pick a new home too. It would happen this way - the homeowner can use the equity from the old home to pay for the new home. Once an old home is sold and the mortgage is repaid, the mortgage that was meant for the new home prevails.
The key elements of a blanket mortgage:
An efficient insurance provider will offer blanket financing all-inclusive of risk coverage for both residential and commercial properties.
The key features:
- Wide coverage of dangers posed to commercial as well as residential properties, excluding flood and earthquake.
- Physical property damage is often taken into account in case of financial losses.
- Keeping a check on each loan is not required.
- Premiums, which are monthly or annually, depend on portfolio size, involvement in lending activity, location and outstanding loan balances.
- Based on replacement cost, adjustments for losses are made.
A perfect example to talk about in case of blanket mortgage insurance is of a restaurant. These areas are more prone to risks from fire and vandalism. This blanket coverage acts like strong protection from all such damages. The financing experts usually begin with reviewing your insurance requirements, and depending on them, they offer you the best suitable solution and coverage.