First lien mortgage

First lien mortgage: The primary lien against a homeowner’s property.

First lien mortgage: The primary lien on the property that secures the mortgage and takes precedence over all claims on a property if a default occurs.

First Lien Mortgage: The Primary Lien Against Your Property

A first lien mortgage, the primary lien against a homeowner’s property, takes precedence to all other mortgages. If the property is sold or if the homeowner defaults, the first mortgage must be paid before any other mortgage lien on the property. Typically, the mortgage loan used to acquire the property is secured by the first mortgage.

After obtaining a mortgage loan, the homeowner will sign a promissory note, or a promise to repay the amount borrowed, consistent with the terms of the note. A homeowner will also sign a mortgage, which grants the bank a lien, or security on the property.

If the homeowner should fail to pay back the loan, the bank, in keeping with the mortgage contract, will be allowed to satisfy the outstanding debt. If there is more than one mortgage, the first mortgage loan will be paid before any secondary mortgage loans are repaid.

“If a home has more than one lien, priority determines the lien holders’ rights following a foreclosure sale. Because a foreclosure sale brings in a finite amount of money—frequently less than the borrower owes to the first mortgage lender—a second mortgage lender and other low-priority lien holders sometimes don’t receive any of the proceeds from the foreclosure sale,” says Seattle attorney Luis Emilio Carlo.

Once the mortgage loan is paid off, a release of lien or certificate of satisfaction will be granted by the bank. The certificate must be recorded in the county records office to provide notice that the lien has been paid in full and released from the property.

“There are some exceptions to the chronological priority of liens. The most common exception is for tax liens: if the lien-holder is a state taxing body, their liens usually supersede any of the other liens. Some states also give “super-priority lien” status to HOA liens or Condominium Owners Association liens, where those liens may take priority over other liens provided that certain conditions are met,” says Seattle attorney Lambros Politis.

First lien mortgage

First lien mortgage: The primary lien against a homeowner’s property.

First lien mortgage: The primary lien on the property that secures the mortgage and takes precedence over all claims on a property if a default occurs.

First Lien Mortgage: The Primary Lien Against Your Property

A first lien mortgage, the primary lien against a homeowner’s property, takes precedence to all other mortgages. If the property is sold or if the homeowner defaults, the first mortgage must be paid before any other mortgage lien on the property. Typically, the mortgage loan used to acquire the property is secured by the first mortgage.

After obtaining a mortgage loan, the homeowner will sign a promissory note, or a promise to repay the amount borrowed, consistent with the terms of the note. A homeowner will also sign a mortgage, which grants the bank a lien, or security on the property.

If the homeowner should fail to pay back the loan, the bank, in keeping with the mortgage contract, will be allowed to satisfy the outstanding debt. If there is more than one mortgage, the first mortgage loan will be paid before any secondary mortgage loans are repaid.

“If a home has more than one lien, priority determines the lien holders’ rights following a foreclosure sale. Because a foreclosure sale brings in a finite amount of money—frequently less than the borrower owes to the first mortgage lender—a second mortgage lender and other low-priority lien holders sometimes don’t receive any of the proceeds from the foreclosure sale,” says Seattle attorney Luis Emilio Carlo.

Once the mortgage loan is paid off, a release of lien or certificate of satisfaction will be granted by the bank. The certificate must be recorded in the county records office to provide notice that the lien has been paid in full and released from the property.

“There are some exceptions to the chronological priority of liens. The most common exception is for tax liens: if the lien-holder is a state taxing body, their liens usually supersede any of the other liens. Some states also give “super-priority lien” status to HOA liens or Condominium Owners Association liens, where those liens may take priority over other liens provided that certain conditions are met,” says Seattle attorney Lambros Politis.

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