Definition:
A further advance refers to the additional loan amount that a mortgagee may agree to lend to the mortgagor, who has already borrowed money to purchase a house. This can be secured by the same collateral used for the initial loan or by a different asset. Additionally, further advance can also refer to the accumulation of interest on a mortgage, resulting in the borrower owing a higher overall amount.
A further advance refers to a second or subsequent loan given by a mortgagee to a mortgagor, either on the same security as the original loan or on an additional security. It can also involve the conversion of arrears of interest on a mortgage security into principal.
For example, John obtained a mortgage on his house and later required additional funds. He approached the same mortgage company for a further advance, which they agreed to provide on the same security as the original loan.
In another scenario, Mary had fallen behind on her mortgage payments and accumulated a significant amount of interest. She requested her mortgage company to convert the arrears of interest into principal, allowing her to pay it off gradually. This is an instance of a further advance.
These examples demonstrate how a further advance operates, showing how individuals can obtain additional funds or restructure their mortgage to better manage their financial obligations.
A further advance refers to an additional loan or borrowing that a borrower seeks from their existing lender, usually secured against the same property.
Yes, you can apply for a further advance if you have an existing mortgage. It allows you to borrow additional funds without having to refinance your entire mortgage.
You can use a further advance for various purposes, such as home improvements, debt consolidation, purchasing additional property, or funding education expenses.
The lender will assess your financial situation, including your income, credit history, and the current value of your property, to determine the amount you can borrow as a further advance.
Yes, you will need to go through a similar application process as you did for your initial mortgage. This includes providing financial documents, undergoing a credit check, and potentially getting a property valuation.
Yes, you have the option to switch lenders for a further advance. However, it is important to consider any potential costs or fees associated with switching lenders before making a decision.
Getting a further advance allows you to access additional funds without having to go through the process of refinancing your entire mortgage. This can save you time, paperwork, and potentially avoid any early repayment penalties.
As with any borrowing, there are risks involved in taking a further advance. It increases your overall debt and may result in higher monthly repayments. It is important to carefully consider your financial situation and ability to repay before taking a further advance.
Yes, you can typically repay a further advance early. However, it is important to check with your lender regarding any potential early repayment penalties or fees.
If you default on a further advance, the lender may take legal action to recover the outstanding debt. This can include repossession of the property if it was used as security for the further advance. It is crucial to seek legal advice if you are facing difficulties in repaying your further advance.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
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