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Addendum
A mortgage addendum is a separate legal document attached to a mortgage agreement that adds, clarifies, or documents specific conditions without rewriting the original contract.
Addendum – Quick Facts
• Attached to the mortgage contract as a separate document
• Becomes legally binding once signed
• Used to document special conditions or exceptions
• Common in purchases, renewals, and refinances
• Does not replace the original mortgage agreement
What Is a Mortgage Addendum?
A mortgage addendum is used when standard contract language does not fully capture the details of a borrower’s situation. Instead of rewriting the mortgage, the lender attaches an addendum to address specific conditions, requirements, or exceptions.
In Canada, addenda are frequently used to document insurer conditions, temporary requirements, or pricing exceptions granted during underwriting. Once signed, the addendum carries the same legal weight as the mortgage contract itself.
Why Does a Mortgage Addendum Matter?
A mortgage addendum often includes obligations that are not repeated elsewhere in the mortgage documents. Missing a condition in an addendum can delay funding, change pricing, or create compliance issues at closing.
For borrowers, understanding the addendum is just as important as understanding the main mortgage agreement.
How Does a Mortgage Addendum Affect Borrower Segments?
Homebuyers: An Addendum commonly includes conditions such as repair holdbacks, proof-of-funds requirements, or sale-of-property clauses. Failure to meet these conditions can delay or prevent closing.
Renewers: At renewal, an addendum may document temporary pricing, payment arrangements, or non-standard terms tied to the renewal offer.
Refinancers: A refinance addendum often sets limits on future refinancing, prepayments, or property use to manage lender risk.
Example of a Mortgage Addendum
A mortgage lender may offer a discounted interest rate on the condition that automatic payments remain active. This requirement is documented in an addendum. If the borrower cancels automatic payments, the rate may revert to the higher base rate listed in the main contract.
Common Mistakes and Misunderstandings About a Mortgage Addendum
• Assuming that an addendum is for informational purposes only
• Missing deadlines listed only in the addendum
• Not realizing that an addendum can override conflicting contract terms
• Confusing an addendum with an amendment
Frequently Asked Questions (FAQ) About Mortgage Addendum
Is a mortgage addendum legally binding?
Yes, once signed, a mortgage addendum has the same legal force as the mortgage contract.
Can an addendum affect my interest rate?
Yes, an addendum often documents special pricing or conditions tied to a rate.
Does an addendum require requalification?
No, an addendum doesn’t usually require requalification unless it involves increased risk or new credit.
Can I refuse to sign an addendum?
Yes, you can refuse to sign an addendum, but the lender may decline to fund or renew the mortgage.
Is an addendum permanent?
The permanency of a mortgage amendment may be limited or apply for the entire mortgage term.
Related Terms
• Mortgage Contract
• Amendment
• Mortgage Renewal
• Commitment Letter
• Mortgage Underwriting