What Is An Open End Mortgage? β Pros And Cons One Must Know
What Is An Open End Mortgage? β Pros And Cons One Must Know
Abstract
About Open End Mortgage When you buy a home, you apply for a mortgage for a qualified amount and repay the mortgage in monthly installments. What Is An Open-End Mortgage? It is a mortgage where a borrower can take an additional loan on the same primary mortgage up to a specified limit. Suppose you took a mortgage of $250,000 to buy a house, but are eligible for an open-end mortgage of $ 350,000. How Does A Open End Mortgage Work? An open-ended mortgage can be compared to a term loan with a delayed drawing option. Open-ended mortgages are unique because they are mortgages that are secured by real estate with funds that are only used to invest in the same property. In the case of an open-ended mortgage, the borrower may obtain the additional loan amount at any time set out in the loan terms. Rotating credit terms ensure that funds remain open indefinitely till the borrower fails to make the payments What Are The Pros And Cons Of Open End Mortgages? Pros: Cons: Conclusion An open-end mortgage is a combination of a traditional mortgage and a HELOC. It ensures that you have access to funds for your property in the future without going through the qualifying process once again.
