Definition of First mortgage:
When an individual wants to buy a property, they may decide to finance the purchase with a loan from a lending institution. The lender expects the home loan or mortgage to be repaid in monthly installments, which include a portion of the principal and interest payments. The lender will have a lien on the property since the loan is secured by the home. This mortgage taken out by a homebuyer to purchase the home is known as the first mortgage.
Primary claim on a property which takes precedence over all other subsequent claims (called junior claims), and will be paid first from the proceeds in case of the propertys foreclosure sale. Also called first lien. See also second mortgage.
A first mortgage is a primary lien on a property. As a primary loan that pays for the property, the loan has priority over all other liens or claims on a property in the event of default. A first mortgage is not the mortgage on a borrower’s first home; it is the original mortgage taken on any one property. It is also called First Lien. If the home is refinanced, the refinanced mortgage assumes the first mortgage position.
How to use First mortgage in a sentence?
- If the loan-to-value (LTV) ratio of a first mortgage is greater than 80%, lenders generally require private mortgage insurance.
- The mortgage interest paid on a first mortgage is tax-deductible, only applicable to taxpayers that itemize expenses on their tax returns.
- A first mortgage is a primary lien on the property that secures the mortgage.
- The second mortgage is money borrowed against home equity to fund other projects and expenditures.
Meaning of First mortgage & First mortgage Definition