CHAPTER 4.04. Future Advances

• Jurisdiction: United States

4.04. Future Advances

A Delaware mortgage may secure not only existing indebtedness but also future loan advances, whether optional or obligatory, and may preserve the original lien priority of the mortgage for each of those future advances.¹⁸ A mortgage securing future advances must contain a statement that it intends to secure future advances or it must secure a written obligation providing for future advances; however, the total unpaid principal balance secured by the mortgage may not exceed the maximum principal amount of the obligation specified in such mortgage or such other recorded obligation without affecting the lien priority of the mortgage.¹⁹ The mortgage may also secure future financial obligations (for example, payment of property taxes on the mortgaged property) independently of the maximum principal amount of the loan and maintain the original lien priority of the mortgage for those payments.²⁰

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Notes:

^[18] 25 Del. C. § 2118(a).

^[19] Id.

^[20] Id.