Definition

Noun: A first mortgage is a primary loan secured by real property. It holds the highest priority claim against the property in the event of a default, meaning it must be repaid before any other subsequent mortgages or liens (except for those mandated by law, such as property taxes).

Usage

A "first mortgage" is the initial and most senior loan placed on a property. It is the primary financial instrument used to purchase real estate. - The bank approved a first mortgage for 80% of the home's purchase price. - When they refinanced their house, they paid off the original first mortgage and took out a new one.

Advanced Usage

• Priority in Foreclosure: In a foreclosure sale, the proceeds are used to pay off the first mortgage in full before any other lenders receive payment.
• Combined Loan-to-Value (CLTV): The first mortgage amount is a key component in calculating the total CLTV ratio when a second mortgage or home equity line of credit (HELOC) is also present.

Variants and Related Words

• Second Mortgage (noun): A subordinate loan secured by the same property, which is repaid only after the first mortgage is satisfied.
• Lien (noun): A legal right or interest that a creditor has in another's property, lasting until a debt is paid. A first mortgage is a type of voluntary, specific lien.
• Primary Lien (noun): Another term for a first mortgage, emphasizing its senior status.

Synonyms

• Senior Mortgage
• Primary Mortgage

Related Phrases

• "To hold the first mortgage": To be the lender of the primary loan.
  • The local credit union holds the first mortgage on their property.
• "First-lien position": The legal status of having the first claim on the collateral.
  • The bank's loan is in first-lien position on the commercial building.

Noun

1. a mortgage that has priority over all mortgages and liens except those imposed by law