Finance
In New York, a 'subordinate mortgage' is one that:
AHas priority over all other liens on the property
BHas a lower priority than a senior (first) mortgage; in a foreclosure, the senior mortgage is paid first from the sale proceeds✓ Correct
CIs held by a government agency
DHas a lower interest rate than market rate
Explanation
A subordinate (or junior) mortgage in New York has a lower priority than a senior (first) mortgage. In a foreclosure sale, the senior lienholder is paid first, with remaining proceeds going to junior lienholders in order of priority.
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Key Terms to Know
Agency
A legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
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.
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.
Math Concepts
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