A lender provides a borrower with a loan to purchase a property and includes a provision in the mortgage agreement that allows the lender to extend additional credit to the borrower under the same mortgage without executing a new agreement. This type of security device is best described as:
A future advance mortgage permits the lender to provide additional funds to the borrower under the existing mortgage agreement, eliminating the need for a new mortgage. This distinguishes it from a purchase money mortgage, which finances the initial purchase, an installment land contract, which involves periodic payments to the seller, and an absolute deed as security, which does not allow for future advances.
Ask Bash
Bash is our AI bot, trained to help you pass your exam. AI Generated Content may display inaccurate information, always double-check anything important.
What is a future advance mortgage?
Open an interactive chat with Bash
How does a future advance mortgage differ from a purchase money mortgage?
Open an interactive chat with Bash
What are the implications of using a future advance mortgage?