Terminology Tip

Stephen Singh
by Stephen Singh
May 19, 2016
Terminilogy For Web

FIRST VS. SECOND MORTGAGES – A first mortgage is the primary mortgage on a property.  As the primary lien against a property, this mortgage is the first to be paid from the proceeds of the property’s sale.

A second mortgage is another lien on the property, in second position, usually issued at a higher interest rate than the first mortgage, using the equity in the home itself as collateral.  While the first mortgage is typically arranged to purchase the home, the second mortgage often provides the owner their equity for alternate purposes, including paying off higher-interest debts or acquiring other assets.