SUBMORTGAGE Meaning and
Definition
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A submortgage refers to a secondary or subordinate mortgage that is created on a property already encumbered by an existing primary mortgage. In simpler terms, it is a mortgage lien that is secondary to the original mortgage on a property. The submortgage holder has a lower priority compared to the primary mortgage holder if the property goes into default or foreclosure.
A submortgage typically arises when a property owner seeks additional financing while a primary mortgage is still in effect. The borrower uses the property as collateral for obtaining a submortgage loan. The submortgage lender then places a lien on the property, gaining a legal interest in it. However, it is important to note that the submortgage lender holds a lower priority than the original primary mortgage lender, which means that in the event of default or foreclosure, the primary mortgage lender will be paid off first before the submortgage lender is entitled to any proceeds or satisfaction of their debt.
Submortgages can be beneficial to borrowers seeking additional funds for various purposes, such as home improvements, debt consolidation, or investments. However, they carry higher risk for the submortgage lender due to the lower priority of their lien on the property. The terms and conditions of a submortgage, including interest rates and repayment schedules, are typically negotiated between the borrower and the lender.
Overall, a submortgage represents a secondary mortgage lien on a property that is subordinate to an existing primary mortgage.
Common Misspellings for SUBMORTGAGE
- aubmortgage
- zubmortgage
- xubmortgage
- dubmortgage
- eubmortgage
- wubmortgage
- sybmortgage
- shbmortgage
- sjbmortgage
- sibmortgage
- s8bmortgage
- s7bmortgage
- suvmortgage
- sunmortgage
- suhmortgage
- sugmortgage
- subnortgage
- subkortgage
- subjortgage
- submirtgage
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