Close Modal×
Choose your "State” and “Program”
Choose State
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
Washington D.C.
West Virginia
Wisconsin
Wyoming
Choose Program
Earn License
Exam Prep
Post License
Broker License
Continuing Education
Career Courses
Log In
Close Modal×
Choose your "State” and “Program.”
Choose State
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
Washington D.C.
West Virginia
Wisconsin
Wyoming
Choose Program
Earn License
Exam Prep
Post License
Broker License
Continuing Education
Career Courses
Pricing
888-317-8740
Log in
Log in
Pricing
Earn License
Earn License
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
Washington, D.C.
West Virginia
Wisconsin
Wyoming
Exam Prep
Exam Prep
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
Washington D.C.
West Virginia
Wisconsin
Wyoming
Post-License
Post-License
Alabama
Arkansas
Deleware
Florida
Georgia
Idaho
Illinois
Indiana
Kentucky
Louisiana
Mississippi
Nevada
New Mexico
North Carolina
Ohio
Oklahoma
Oregon
Pennsylvania
South Dakota
Tennessee
Texas
Utah
Virginia
Washington
Upgrade License
Broker License
Alabama
Arizona
California
Colorado
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Maine
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Nevada
New Mexico
New York
North Carolina
Ohio
Oregon
Pennsylvania
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
Career Courses
Certified Real Estate Specialist
Continuing Education
Continuing Education
Alabama
Arizona
Arkansas
California
Colorado
Connecticut
Florida
Georgia
Illinois
Iowa
Kansas
Kentucky
Maryland
Michigan
Missouri
Nevada
New Jersey
New Mexico
North Carolina
Ohio
Oregon
Pennsylvania
South Carolina
South Dakota
Tennessee
Texas
Utah
Virginia
Washington
Wisconsin
Resources
About Us
Terms & Conditions
FAQs
Pass Guarantee
Testimonials
Contact Us
Blog
888-317-8740
Log in
Pricing

What are Package Mortgages in Real Estate?

By
Chase Milner
|
Oct 30, 2024
5 min
Learn More - Our ProgramEnroll Now

Mortgage loans play a crucial role in real estate transactions. It's important to know the different types available, including package mortgages. This article explains what package mortgages are, how they differ from other loans, and what you need to know for the real estate exam.

What is a Package Mortgage?

A package mortgage is a loan that covers both the purchase of a property and the personal property inside it, such as appliances and furniture. Both the real estate and personal property are used as collateral for the loan. For example, if a home is valued at $200,000 and has $50,000 worth of personal property, a package mortgage could be obtained for $250,000 to cover both.

Advantages and Disadvantages of Package Mortgages

Advantages:

  • Allows for one payment at a low-interest rate for both the house and personal property.
  • Ideal for buyers who may not have enough savings to cover down payments, closing costs, and personal property purchases.

Disadvantages:

  • The lender can use both the house and personal property as collateral if mortgage payments are not made.
  • Borrowers cannot sell any personal property included in the loan without lender approval.

How Do Mortgages Work?

A mortgage is essentially a loan secured by a property where the borrower agrees to repay the borrowed amount over a set period. To be eligible for a mortgage, buyers need to satisfy the lender's requirements, which usually involve assessing the buyer's credit history, debt levels, income, and the costs associated with owning a home. When evaluating a loan application, lenders often consider the four main components of a mortgage payment, known as PITI: principal (the loan amount), interest (the cost of borrowing), taxes (property taxes), and insurance (homeowners insurance).

For example, if a buyer takes out a $200,000 mortgage with a 4% interest rate for 30 years, the principal is $200,000 and the interest is the cost of borrowing that amount over the loan term. Additionally, the buyer will need to pay property taxes and homeowners insurance, which are included in the monthly mortgage payment. The lender will review all of these factors to determine if the buyer qualifies for the loan.

Different Types of Mortgages

Conventional Mortgage: 

Not backed by the federal government, usually requires a higher down payment.

Jumbo Mortgage: 

Used for higher-priced homes, depending on local standards.

Fixed-Rate Mortgage: 

Interest rate remains the same throughout the loan term.

Adjustable Rate Mortgage (ARM): 

Interest rate changes annually.

Federal Housing Administration (FHA): 

Government-backed loans requiring lower down payments.

VA (Department of Veterans Affairs): 

Loans for military members or veterans; no down payment required.

USDA (U.S. Department of Agriculture): 

Loans for rural areas; no down payment required.

Construction Mortgage: 

For financing a house being built or renovated.

Home Equity Loan: 

Borrowing against the equity built in a home.

Purchase Money Mortgage: 

Seller financing, where the buyer makes payments directly to the seller.

Balloon Mortgage: 

Lower payments initially, with a larger payment at the end of the term.

Blanket Mortgage: 

Used to purchase multiple properties under one loan.

Package Mortgage vs. Blanket Mortgage

When comparing package mortgages and blanket mortgages, it's important to understand their distinct purposes and structures:

Package Mortgage:

  • A package mortgage is a unique type of loan that combines financing for both a house and the personal property contained within it, such as appliances and furniture.
  • Both the real estate and the personal property are used as collateral for the loan. This means that if the borrower defaults on the loan, the lender has the right to seize not only the house but also the personal property financed under the package mortgage.
  • This type of mortgage is beneficial for buyers who wish to finance the purchase of a home and its contents together, potentially simplifying the buying process and possibly securing a lower interest rate for the total package.

Blanket Mortgage:

  • A blanket mortgage, on the other hand, is designed to finance multiple real estate properties under a single loan. This is often used by investors, developers, or builders who are dealing with several properties at once.
  • With a blanket mortgage, all the properties are used as collateral. This means if the borrower defaults on the loan, the lender can potentially take possession of all the properties under the blanket mortgage.
  • This type of mortgage is advantageous for those looking to streamline their financing process for multiple properties as it eliminates the need for multiple loans and closing processes.

In summary, while a package mortgage combines financing for a home and its contents, a blanket mortgage consolidates financing for multiple real estate properties. Both have their specific use cases and benefits depending on the borrower's needs.

Key Points for the Real Estate Exam

When preparing for the real estate exam, it's important to grasp the concept of a package mortgage. This type of loan not only finances the purchase of real estate but also includes the personal property within it, like furniture or appliances, with both assets serving as collateral. 

Additionally, a solid understanding of the key differences between various mortgage types, such as Conventional, FHA, VA, USDA, fixed-rate, and variable-rate mortgages, will be beneficial. It's also crucial to distinguish between package mortgages and blanket mortgages. While a package mortgage is used for financing a single property along with its personal contents, a blanket mortgage is designed for financing multiple separate properties under one loan agreement. 

To get better prepared for the real estate exam, consider signing up for our real exam prep package where we cover everything you need to know to succeed.

Final Thoughts

Mortgage loans play a critical role in real estate transactions. Unless the transaction is fully paid in cash, loans are the next viable option.

Want to make studying for the real estate exam? Join our real estate crash course and exam prep program.

When you join, you get 8+ hours of video content designed to teach you the concepts, vocabulary, historical events, and laws you’ll see on the national real estate exam.

Our exam prep package comes with unlimited practice exams, vocabulary flashcards, an eBook study guide, thousands of question and answer videos, and video explainers.

Get both program together or individually. You can access the real estate crash course videos and prep package using the US Realty Training app.

To join the program, click the button below. Let’s make studying easy!

Enroll Now

TL;DR: Understanding mortgage types, including package mortgages, is essential in real estate. Package mortgages cover the property and its contents, offering one low-interest payment but with the drawback of using both as collateral if payments aren't made. It's important to grasp this concept and distinguish it from other mortgage types like conventional, FHA, VA, and USDA loans, as well as blanket mortgages that finance multiple properties.

By
Chase Milner
|
Oct 30, 2024
Terminology
5 min
Exam Prep

What is the Difference Between Lessor vs Lessee?

Terminology
October 14, 2024

What is the Defeasance Clause in Real Estate Mortgages

Tips
Real Estate Career
Terminology
October 31, 2024
Popular articles
How to Become a Property Manager in California
Becoming a Real Estate Agent: 10 Pros and Cons
Ultimate Guide to Passing the Real Estate Exam on Your First Try
What’s the Hardest Part of the Real Estate Exam?
Can Real Estate Agents Represent Themselves?
Popular tags
How To
Marketing
don't miss a post!
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Blue arrow.

‍CONTACT US
Faqs
EXPLORE
Career Course
REVIEWS
HELPFUL TIPS
& ARTICLES
Meet
Our trainers
Facebook icon.YouTube icon.LinkedIn icon.Instagram icon.TikTok icon.
Login
Contact Us
Contact Info

Office Hours
Monday - Friday, 9:30am-5:00pm (PST)
‍

Admissions: 
‍Enroll@USRealtyTraining.com 
Student Services: 
Support@USRealtyTraining.com
Phone: 888.317.8740

Office Headquarters

US Realty Training
12130 Millennium Drive, Suite 300
Los Angeles, CA 90094

Additional Links
Terms and ConditionsSupporting Our CommunityAffiliate Login

© 2025 US Realty Training. All Rights Reserved.