Blanket Loan vs 5 Conventional Mortgages
I'm looking to purchase 5 new units in a short period of time.
My question is: Is it better to take 5 individual mortgages, one for each property or a blanket loan?
Background: These would be short term vacation rentals. Each cost roughly 200-350k. Will probably end up landing around 1.25m-1.5m total cost.
Conventional mortgage Pros:
30 year fixed, traditional 20% down, best interest rate
Conventional mortgage Cons:
5 new sets of payments, 5 sets of closing costs, 5 times going through the conventional process (sounds painful), will use my last 5 conventional loans avail (at 5 currently)
Blanket Loan Pros:
Simplicity; 1 payment, 1 loan app and process
Blanket Loan Cons:
10 year term, 2-3% higher rate, 25-30% down
The properties will cash flow either way and I don't need the cash flow immediately. It's a long term play. I'm leaning towards the blanket loan, but wanted the opinion of others to see if theres anything i'm missing or not thinking of.
Appreciate your thoughts!
Most Popular Reply
@Mike Verna Have you done your calculations on higher interest rate for this loan? If its makes sense go for blanket loan. You are not planning to cash out for long time, would make sense go for conventional.