What best describes a blanket mortgage?

A blanket mortgage is a type of financing that applies to multiple properties under a single loan agreement. This is especially beneficial for developers or investors who want to purchase several lots, buildings, or parcels of land.

One key characteristic of a blanket mortgage is that it typically includes a release clause. This clause allows the borrower to sell off individual properties without paying off the entire mortgage. In this way, once a parcel is sold, the loan is reduced to reflect this sale, making it easier for the borrower to manage the financial obligations associated with multiple properties.

Additionally, a blanket mortgage covers more than one parcel of real estate, making it distinct from traditional mortgages that focus solely on single properties. This enables borrowers to consolidate financing for various properties, thereby streamlining their management and potentially reducing costs.

Both of these features—having a release clause and covering multiple properties—highlight the multifaceted nature of blanket mortgages. This understanding is crucial for anyone looking to engage in real estate ventures involving multiple sites.