Escrow & Title
The priority of a mortgage lien in Minnesota is generally determined by:
AThe amount of the loan
BThe date and time of recording in the county recorder's office (first to record has priority)✓ Correct
CThe creditworthiness of the borrower
DThe type of lender (bank vs. credit union)
Explanation
Lien priority in Minnesota is generally determined by the order of recording (first in time, first in right). The first mortgage recorded has priority over subsequently recorded mortgages or liens (except for real estate tax liens, which always have priority).
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Key Terms to Know
Lien
A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
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.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
Abstract of TitleA condensed history of a property's title, summarizing all recorded documents and encumbrances affecting it from the earliest record to the present.
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