Finding a great investment property is one thing—securing financing, particularly for a dilapidated or uninhabitable property, is another. Traditional lenders often shy away from these deals, but at Calvert Home Mortgage, we offer a creative solution: blanket mortgages.
What is a Blanket Mortgage?
A blanket mortgage allows you to use the equity in one property to fund the down payment or renovations of another. It’s an excellent tool for Real Estate Investors, especially those working on BRRR (Buy, Renovate, Rent, Refinance) or flip projects. You can unlock capital without draining your resources or relying on traditional lenders who may not fund unconventional properties.
Funding an Investment with a Blanket Mortgage
Take a look at how one of our clients used a blanket mortgage to fund a unique investment opportunity.
A Real Estate Investor owned a property worth $900,000 with an existing $450,000 mortgage. They wanted to purchase an off-market, uninhabitable property listed at $650,000, which required a $145,000 down payment. However, traditional lenders were not an option due to the Real Estate Investor’s high debt-to-income ratio, the property’s uninhabitable condition, and a lack of cash for the down payment.
Calvert Home Mortgage stepped in with a blanket mortgage. Here’s how it worked:
- The client’s existing property had enough equity to cover the down payment. We lent up to 75% Loan-to-Value (LTV) on the $900,000 property, which allowed the Real Estate Investor to access $225,000.
- In securing both properties, the Real Estate Investor was able to borrow against the equity in their current property and walk out of the lawyer’s office with a draft in hand, ready to finance $80,000 worth of renovations. We considered the remaining equity of approximately $145,000 a secured down payment, enabling the client to trigger a lower-rate option without having to put any cash down on the purchase. With no appraisal* and no delays, the deal was sealed. * No appraisals are required for properties valued up to $1.5 million. Our team of Real Estate Analysts conducts free in-house valuations, typically completed within 1 business day. Appraisals are required on multi-family properties greater than four units.
This quick, creative mortgage solution allowed the Real Estate Investor to move forward with their project in just two business days!
How Calvert Home Mortgage Supports Real Estate Investors
Calvert Home Mortgage specializes in funding properties that don’t fit conventional standards. Here’s how we can support Real Estate Investors in Ontario and Alberta:
- We understand the urgency in securing Flip/BRRR mortgages and can provide funding on a rush basis in as little as 1-3 business days in Ontario and 1-2 business days in Alberta after receiving all required documents. A rush fee of up to $1,000 may apply.
- No appraisals are required for properties valued up to $1.5 million. Our team of Real Estate Analysts conducts free in-house valuations, typically completed within 1 business day. Appraisals are required on multi-family properties greater than four units.
- Minimum $20K down in Ontario and $10K down in Alberta on properties valued up to $800K. We do this by lending against the after-repair value on approved projects.
- Fully open mortgages with no prepayment penalties and a no renewal fee option for borrowers in good standing.
- We fund properties in all conditions.
- We can pre-approve you before submitting a project and before you make an offer to purchase. To do so, we evaluate the property’s after-repair value and determine the likelihood of success.
The Bottom Line
If you’re a Real Estate Investor looking to flip a property or tackle a BRRR project, Calvert Home Mortgage’s fast, flexible, and creative mortgage solutions can support your success.
Click here to book a free discovery call to learn more with one of our team members.
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