open-end mortgage

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Open-end mortgage

Mortgage against which additional debts may be issued. Related: Closed-end mortgage.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Open-End Mortgage

In real estate, a mortgage in which the principal amount may be increased. That is, further borrowing is permitted using the same property as collateral. See also: Closed-End Mortgage.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

open-end mortgage

A mortgage that permits the issuer to sell additional bonds under the same lien. If the amount of additional bonds is restricted, the mortgage is referred to as a limited open-end mortgage. Compare closed-end mortgage.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

open-end mortgage

A mortgage loan that may allow future advances as the value of the property increases, up to a certain percentage of loan-to-value.The legal problem with this arrangement occurs when loan 1 is an open-end mortgage, lender 2 loans money to the borrower and takes a second mortgage, and then lender 1 advances additional money under its open-end mortgage. If there is a foreclosure or bankruptcy,and not enough money to pay everyone,in what order are the loans paid? The answer depends on the borrower's state, the precise language of the open-end mortgage, and/or whether lender 2 gave notice to lender 1 of the new loan. See future advances mortgage. Do not confuse with an open mortgage.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.