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Simple English definitions for legal terms
further advance
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A quick definition of further advance:
Further advance: When someone borrows money to buy a house, they usually get a loan called a mortgage. Sometimes, the person who lent the money (the mortgagee) might agree to lend more money to the borrower (the mortgagor). This is called a further advance. It can be on the same thing that was used as security for the first loan, or on something else. Another meaning of further advance is when the interest that someone owes on their mortgage gets added to the amount they borrowed, so they end up owing more money overall.
A more thorough explanation:
Definition: A further advance is a second or subsequent loan given by a mortgagee to a mortgagor. This loan can be given on the same security as the original loan or on an additional security. It can also refer to the conversion of arrears of interest on a mortgage security into principal.
1. John took out a mortgage on his house and later needed more money. He went back to the same mortgage company and asked for a further advance on his mortgage. The mortgage company agreed to give him the additional loan on the same security as the original loan.
2. Mary fell behind on her mortgage payments and owed a lot of interest. She asked her mortgage company if they could convert the arrears of interest into principal so that she could pay it off over time. This is an example of a further advance.
These examples illustrate how a further advance works. In the first example, John needed more money and was able to get it from the same mortgage company. In the second example, Mary was able to convert her arrears of interest into principal, which made it easier for her to pay off her mortgage over time.