The blanket mortgage is a way to do all of your financing with one mortgage application. It covers both current properties that can be used as collateral and potential properties that will arise once a plot of land is developed.

Individual homeowners can use blanket mortgages to cover construction of a new home while they are trying to sell their existing property. Once old property is sold off, blanket loan is reduced by dollar amount of equity in previous home. Some lenders will allow you to pay interest only on amount that is budgeted for construction of new property.

Who gets buy downs? Buys downs are perfect for upwardly mobile. That is singles or couples who are purchasing their first home, but expect a rapid or substantial increase in their income within a couple of years.

Unlike a fixed rate mortgage your payments will be steadily increasing over years. In addition, unlike an adjustable rate mortgage, you will find yourself paying way over market rate for last few years of loan.

These types of loans are usually setup as 15-year of 30-year deals. The big advantage of course is that you can get a lot of house for very little money up front. However, seller or lender will reap a much higher rate of return on your loan than he or she should get on a fixed rate or regular adjustable rate mortgage.

It’s a great deal in beginning, but make sure you will have income later on to cover large payments plus your other household expenses.