Future Advance Mortgages
A future advance mortgage secures both the initial loan and additional funds the lender may advance after recording. Common in HELOCs, construction loans, and commercial revolving credit, it eliminates the need for new mortgages with each advance.
Common Applications
- HELOCs: Home equity lines with draw/repayment periods
- Construction loans: Funds disbursed in draws as work progresses
- Commercial credit: Revolving credit facilities
- Agricultural lending: Seasonal borrowing needs
Lien Priority (§697.04)
- Future advances maintain the original mortgage's priority
- Obligatory advances have stronger priority protection
- Optional advances may have weaker priority in some cases
- Mortgage must specifically state it secures future advances
Risks
- Over-borrowing against property equity
- Total debt may exceed property value
- Complicates lien searches for title professionals
- Variable rates on HELOCs can increase costs
Related Terms
- Encumbrance — The mortgage lien
- Equity — Equity accessed through advances
- Closing — Future advance terms at closing
Barnes Walker Title Services
Barnes Walker Title reviews future advance mortgage provisions and analyzes lien priority for Florida closings. Submit a title inquiry for assistance.
Florida Law Reference
Fla. Stat. Ch. 697
Defines mortgages as liens on real property and establishes requirements for mortgage creation, assignment, and satisfaction in Florida.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC