The timing problem: you need equity from your current home to buy the next one. But you need somewhere to live while your home is on market. Traditional solutions are expensive. Bridge loans have high interest rates. Contingent offers make you less competitive. Temporary housing means moving twice.

There's another option: blanket loans. For homeowners with substantial equity, they solve the timing problem differently.

What Is a Blanket Loan

A blanket loan is one mortgage covering two properties: your current home and the new one. One payment, one rate, one set of terms. When you sell the original property, proceeds pay down the loan and you refinance into a standard mortgage.

Blanket vs Bridge vs Contingent

Contingent offers: Make purchase contingent on selling current home. Sellers often reject these or accept backup offers.

Bridge loans: Short-term financing with higher interest rates and strict timelines. You carry two full mortgages.

Blanket loans: Single mortgage covering both properties with standard terms. More flexibility but requires substantial equity.

When Blanket Loans Work

• You have 25-30% equity minimum in current home
• Your property needs time to sell (rural, unique, seasonal market)
• You want to avoid double moves and temporary housing
• You're in competitive market where contingent offers hurt
• You need time to prepare vacant home for better sale

Real Costs and Benefits

Potential savings:

• No temporary housing costs (6000-15000 for 3-6 months)
• No storage fees (150-400 monthly)
• Avoid double moving costs (2000-8000 per move)
• Vacant homes sell for 5-10% more when properly staged

Added costs:

• Carrying costs on both properties until first sells
• More complex qualification process
• Potentially higher interest rates from some lenders

How to Get a Blanket Loan

Step 1: Find the right lender. Portfolio lenders and credit unions are better than national banks. They hold loans on their books with more flexibility.

Step 2: Gather documentation. Income verification, current mortgage statements, property appraisals for both homes, insurance proof, credit reports.

Step 3: Understand terms. Ask about maximum loan-to-value ratio, timeline to sell original property, refinancing requirements, prepayment penalties.

Step 4: Plan the sequence. Secure blanket loan, close on new property, move in, prepare old property, list it, sell it, refinance. Typical timeline: 6-12 months.

Why This Works for Ohio

• High homeownership rates mean more buyers have equity
• Affordable housing makes payments on two properties manageable
• Strong regional lenders understand local markets
• Diverse property types benefit from not being rushed
• Seasonal markets let you buy in winter, sell in spring

Common Mistakes

• Overestimating how fast your home will sell
• Not budgeting for carrying costs on both properties
• Choosing lender with punitive terms without shopping around
• Not having backup plan if original home doesn't sell
• Trying to coordinate this without professional guidance

Is This Right for You

Ask yourself:

• Do you have at least 25% equity in current home?
• Would moving into new home first make transition easier?
• Can you afford both properties for 6-12 months if needed?
• Is your home likely to sell better vacant?
• Are you in market where contingent offers hurt your position?

If you answered yes to most questions, a blanket loan might solve your timing problem.

EXPLORE YOUR OPTIONS

If you're facing buy-before-sell timing in Springfield, Dayton, Columbus, or surrounding Ohio areas, let's discuss whether a blanket loan fits your situation. I work with lenders who understand these products and can help plan the entire sequence.

Amanda Mullins, MBA, SRES

Phone: (317) 750-6316

Email: amullinsmba@gmail.com

Serving: Springfield | Dayton | Columbus | Surrounding Ohio