A first mortgage is a primary loan that has priority as a lien over all other mortgages. In cases of foreclosure, the first mortgage will be satisfied before other mortgages.
A Junior Lien is a secondary claim on property collateral that will be paid after earlier liens, also known as senior liens, have been satisfied. This hierarchical structuring of claims often influences the risk and terms associated with secondary loans or mortgages.
Discover comprehensive accounting definitions and practical insights. Empowering students and professionals with clear and concise explanations for a better understanding of financial terms.