As we all know that mortgage is an amount that is borrowed by a borrower in order to gain financial assistance. There are different types and kinds of mortgage and one of them is the open end mortgage. Open End Mortgage is a type of mortgage that allows the borrower to increase the amount of the borrowed mortgage at some point later in the deal. If a borrower is enjoying open ended mortgage he or she is allowed to go back to the lender to ask for some increase in the amount of mortgage. However the lender will only increase the amount of the mortgage if and only if a few conditions of the deal are met and fulfilled by the borrower. While asking for additional amount from the lender the lender sets a set dollar limit on the additional amount that is paid to the borrower as an additional mortgage.
The example of an open mortgage deal can be explained as a borrower takes a mortgage of $200,000 from a lender in the form of home mortgage. Now if the deal is an open ended mortgage deal the borrower can go back to lender to ask for some additional amount on the existing loan in the form of the mortgage. The lender will allow borrower to enjoy additional amount if certain conditions are met such as if the outstanding premium towards the borrower is not exceeded from a certain limit. For example the premium is not exceeded from the 80 percent of the appraised value of the home that is purchased from mortgage.
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