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Disadvantages of Blanket Real Estate Mortgages for Buyers
When a Blanket Real Estate Mortgage Might Not be a Good Idea

By James Kimmons, About.com

There are definitely advantages for buyers in using blanket real estate mortgages. However, there are also considerations that may make them a poor idea.

They burden other properties: Should there ever be a problem with paying the mortgage, all involved properties are at risk.

Separation is complicated: Should the borrower decide to sell one of the subject properties, the separation can be a problem. Unless the equity is sufficient in the remaining property(ies), it could require refinancing to free up the other property.

Locked up assets: Related to the separation item above, all the properties in a blanket real estate mortgage are locked up in the transaction. Should the borrower have a need to deal separately with one of the properties at a later date, it can be difficult.

For borrowers wishing to use a blanket real estate mortgage, it is important to weigh the pros and cons. There are definitely situations in which this type of mortgage can be very attractive.

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