Special purpose financing can meet unique borrower needs not addressed in standard marketplace offerings. Here are a few examples:
Blanket Mortgage: A blanket mortgage is a single mortgage registered against two or more properties allowing the lender recourse against all properties should default occur. For example, an owner requires financing for the purchase of a recreational cottage. The lender blankets both the cottage and the borrower's house, as the latter has ample equity to secure the loan.
Bridge Loan: A bridge loan is typically associated with a seller whose home has sold, but not closed. Funds are required to close his or her new purchase with an earlier closing date. Assuming no conditions in the seller's existing home agreement, the lender advances sufficient funds through a bridge loan to be repaid once the home is closed.
Chattel Mortgage: This mortgage is given for personal property or move-able possessions. For example, a new home buyer acquires furnishings which is secured by the furniture retailer using a chattel mortgage registered pursuant to the Personal Property Security Act.
Collateral Mortgage: A collateral mortgage is backed by additional security, which can vary based on the lender's perception of risk. For example, a business person undertakes a new retail venture. He or she secures a loan that is backed by both a personal guarantee (promissory note) and a collateral mortgage registered against his or her home.
Gurdeep Sidhu is a sales representative with Century 21 Miller Real Estate Ltd. in Oakville, Ontario.