Open-End Mortgage

An open-end mortgage is a mortgage that allows the borrower to borrow additional funds in the future under the same mortgage, up to a specified limit.

• Secures future advances
• Maximum loan amount is stated in advance
• Priority dates back to the original recording
• Common for home equity lines of credit (HELOCs)

• Initial loan is recorded
• Borrower may take additional advances later
• No need to record a new mortgage for each advance
• All advances are secured by the same property

• Open-End Mortgage
  • Allows future borrowing
  • Balance may increase

• Closed-End Mortgage
  • Fixed loan amount
  • No additional borrowing allowed

• Advances generally retain the original lien priority
• Later liens are subordinate up to the stated maximum

• Think HELOC
• Open-end mortgages secure future advances
• Priority relates back to the original recording date