Massachusetts Real Estate License Practice Test

What unique feature does an Open End Mortgage provide?

1. The ability to sell the property without a mortgage

2. The option to borrow more money without rewriting the mortgage

3. Reduction of the interest rate at maturity

4. Full repayment on demand

The correct answer is: The option to borrow more money without rewriting the mortgage

An Open End Mortgage is distinctive because it allows the borrower the flexibility to access additional funds without needing to rewrite or refinance the existing mortgage. This means that if the property value increases or the borrower’s financial situation changes, they can borrow more against the same mortgage, extending their borrowing capacity beyond the original loan amount. This feature is particularly advantageous for homeowners looking to finance home improvements or consolidate debts without the hassle and potential costs associated with obtaining a new mortgage. Other choices may present alternative mortgage features, but they do not accurately describe the primary characteristic of an Open End Mortgage, which is its capacity to facilitate additional borrowing under the same terms.