Bringing some Reality
Back to Realty
Definition of a First Mortgage
A first mortgage is a loan taken out, usually to finance the purchase of real property, using the property as collateral for the loan. The lender has a security in the financed property, so that if the borrower defaults in repaying the loan, the lender has a lien on the property and may institute foreclosure proceedings to sell the property in order to recoup the money owed.
A first mortgage is generally used to purchases property. Second mortgages are typically for refinancing purposes, such as obtaining a lower interest rate, converting to a shorter-term mortgage, or to obtain more money for home improvements, etc.
First-time buyers are able to qualify for certain programs with less hassle. If you are a first-time buyer having never obtained a mortgage before, then you have less restrictions for certain programs than you would have if you had a previous mortgage.