All Monies Mortgage Clause

An all monies mortgage clause is a provision in a mortgage agreement that allows the lender to secure all amounts of money the borrower owes or may owe in the future, under various agreements, with the property being used as collateral. In other words, this clause extends the mortgage's security beyond just the loan used to buy the property. It can also secure any other debts the borrower may owe to the lender, such as overdrafts, credit cards, or future loans.

This type of mortgage clause is often used by lenders to ensure they have the right to recover multiple debts owed by the borrower using the same property as security. It essentially allows the lender to consolidate various forms of debt under a single mortgage, reducing the need for multiple securities or mortgage documents for each separate loan or obligation.

For borrowers, the implications of an all monies clause are significant, as it means that their property is at risk not just for the original mortgage loan but for any other debts they owe to the lender. If the borrower defaults on any of these debts, the lender can enforce the mortgage to recover all outstanding amounts, potentially leading to repossession of the property.

For example, if someone takes out a mortgage with a bank and later borrows additional funds from that bank, the all monies mortgage clause may allow the lender to claim repayment of the entire outstanding amount, not just the initial mortgage loan.

This clause provides security for lenders but can be risky for borrowers because it may create a broader lien over the property than they initially expected. It’s essential for borrowers to be fully aware of the implications of such a clause when signing mortgage agreements.