A blanket mortgage or a blanket loan is one which is used for buying more than one piece of property. Such mortgages are popular among builders and developers who do not have to purchase different mortgages for various pieces of real estate. This means that rather than taking out mortgage on each property as and when it is sold individually is not required.

• Normal or conventional mortgages have a clause called “due-on-sale” in which if the property in question is sold then the entire amount that is owed on the mortgage must be paid immediately. This is not the case in a blanket loan or a blanket mortgage since it allows the mortgagor to pay off the mortgage piece by piece.
• The blanket mortgage is also used by developers who need some elasticity: these borrowers purchase great expanses of property which will be subdivided and put up for sale individually at different times in the future, as the development advances. This permits developers to acquire the entire land with a solitary loan, and as each smaller parcel is sold, that piece of the blanket mortgage is fulfilled.
• In blanket mortgages there a “release” clause that allows the borrower to sell off part of the property without refinancing. On the other hand, such types of mortgages are not just limited to builders or developers but can also come in handy to individuals. If a person is looking to buy a new house and is selling an old one then the transition can be made simpler by such mortgage.
• The biggest advantages of blanket loans are efficiency and flexibility that they provide to the borrower. The mortgagor does not have to deal in multiple lines of credit and can easily pay off the entire amount gradually. An additional advantage for borrowers using blanket mortgages is that they might be able to agree upon better terms for the loan. Since they are securing the loan with numerous properties, a number of lenders can put forward improved rates and terms because of the added safety.

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