Finance
A Massachusetts 'second mortgage' is subordinate to the first mortgage, meaning:
AIt is less legal than the first mortgage
BIn foreclosure, the first mortgage is paid first and the second mortgage is paid only from any remaining proceeds✓ Correct
CIt has a lower interest rate than the first
DIt covers a smaller portion of the property
Explanation
In a foreclosure sale, liens are paid in the order of their priority (typically based on recording date). A second mortgage is junior to the first and is paid only after the first mortgage is fully satisfied.
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Key Terms to Know
Adjustable-Rate Mortgage (ARM)
A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Short SaleA sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
Math Concepts
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