HopefullyInLawSchool
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LSDefine
Simple English definitions for legal terms
first mortgage
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A quick definition of first mortgage:
A first mortgage is a type of loan that a person takes out to buy a house or property. It is a way for the lender to make sure they get their money back if the borrower can't pay it back. The borrower gives the lender a legal right to the property until the loan is paid off. A first mortgage is the most important loan on the property and has to be paid off before any other loans.A more thorough explanation:
A first mortgage is a type of mortgage that has priority over all other mortgages on the same property. It is a lien against the property that is granted to secure an obligation, such as a debt, and is extinguished upon payment or performance according to stipulated terms. The first mortgage is senior to any later mortgage and is the primary loan on the property.
For example, if a borrower takes out a first mortgage to purchase a home, that mortgage has priority over any other mortgages that the borrower may take out on the same property in the future. If the borrower defaults on the loan, the lender of the first mortgage has the right to foreclose on the property and sell it to recover the outstanding balance of the loan.
Overall, a first mortgage is an important financial tool for borrowers who want to purchase a property and secure a loan with the highest priority. It provides lenders with a sense of security and ensures that they will be repaid before any other lenders in the event of default.