Definition: First Mortgage

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When we say “first mortgage,” we’re talking about the first mortgage company that’s in line to be paid back.

A first mortgage is where we receive a loan to buy a house.

The loan is also called the “note”.

Once we’ve purchased the house, we make payments back to the mortgage company.

Instead of the mortgage company hoping we pay them back, they¬†give us a mortgage that says we will pay them back, or they can take our house in a foreclosure sale if we don’t pay them.

The mortgage ties the note to the house, and the house makes the mortgage a secured loan.

If you sell your house, then the first mortgage company will get its money back first.

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-John G. Watts

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