After acquired clause

After acquired clause

A contractual clause in a mortgage agreement stating that any additional mortgageable property attained by the borrower after the mortgage is signed will be regarded as additional security for the obligation addressed in the mortgage.

After-Acquired Clause

In bond indentures and mortgages, a clause stating that assets acquired after the contract comes into effect may be regarded as additional collateral for the debt. For example, if a person buys a second house after taking out a mortgage on his/her primary house, the mortgage lender may regard the second house as extra security in the event of default. The after-acquired clause exists to provide additional protection to the lender to ensure that secured debts are paid.