Mortgage – First Mortgage
In the world of
mortgages, there are many terms that people don't know. The term
that we want to be able to go over in this article is the term "1st mortgage". Let's go over exactly what a 1st mortgage is, how it works in the home buying
process, and what it means to you as the borrower.
looking for a home, in order to finance it to buy it, you most likely will need a mortgage. The mortgage that you get on the home will be considered the 1st mortgage, or
the 1st lien holder. This means that if the borrower is unable to
make the payments on the home, the 1st lien holder is entitled to any money that is gained from a lawsuit or
bankruptcy before anybody else. In the event that the home goes
into foreclosure, the company that holds the 1st mortgage on the home will be given ownership to sell the home
on the market.
most people get a 1st mortgage on their home first, these types of loans have low interest rates as their risk
margin is much lower of that of a 2nd mortgage lien holder. This
means that when you are looking for mortgage refinancing, you can get a better rate if you get a
mortgage refinance on the 1st mortgage on your home. In the event
that you have bad credit, the 1st mortgage will usually still always have a better rate than a second
mortgage. This means that as a bad credit mortgage, the 1st
mortgage option is always the way to go by using conventional, FHA, or VA mediums.
borrower, making sure that the 1st mortgage holder is paid first is very important. While a second mortgage should be paid, not paying it will not cause your home
to default if you are paying the 1st mortgage. This means that if
you are running into money troubles, it is always best to pay the 1st mortgage first before anything else, in
order to ensure that you will be able to stay in your house.
can see, the 1st mortgage is the most essential piece of a home loan as that is what most people's home loans
are. Understanding 1st mortgages is a great way to enable a
borrower to shop around and get the best rate possible when looking to buy, refinance, or if they are looking
for a bad credit mortgage.