What is a first mortgage?

Any home or piece of property can have more than one loan. Home mortgage loans in Orinda are registered with the county registrar, the loan that is registered first against a piece of property is considered to be the first mortgage. Subsequent loans or liens against the property are considered as second, third or even fourth mortgages however, third and fourth home mortgage loans in Orinda are far less frequent than first and second mortgages.

In many cases the home buyer will arrange a first mortgage and then take out a second mortgage in the form of a home equity loan. The terms of a second mortgage are usually quite different than the terms of the first mortgage. In many cases a first mortgage may be for a term of 30 years, the repayment schedule for a second mortgage is usually considerably shorter, in some cases the second mortgage loan must be repaid in full within one year.

Home mortgage loans in Orinda are loans that are taken out with the express intent of purchasing a house or any other type of real estate. Many people are not aware of the different types of loans that are available so the term “first mortgage” may make them wonder what it is when they begin actively looking for a house. It takes them very little time to understand exactly what the term stands for; a first mortgage is no more than the primary mortgage taken out on the property.

Anyone who wishes to take out a home mortgage loan must first provide the potential lender with a considerable amount of personal background information. The lender will want to know the details of the applicant’s employment, the applicant’s income as well as current debt load and monthly expenses. These requests must be answered in writing as the lender will need to check the applicant’s credit.

In the event the borrower defaults and there are home mortgage loans in Orinda area in Orinda to be satisfied the first mortgage is satisfied first from any proceeds from the sale of the house. As a result, some lenders are reluctant to consider applications for second mortgages as they have more to lose if the loan goes into default. If the lender does consider a second mortgage they will often charge higher interest rates and they are very strict about the credibility of the borrower.