Finance
In Pennsylvania, a mortgage lien is typically recorded to establish its priority. Priority among mortgage liens is generally determined by:
AThe dollar amount of the loan, largest first
BThe date and time of recording — first recorded is first in priority✓ Correct
CThe type of lender — banks before mortgage companies
DPREC designation of priority at closing
Explanation
Pennsylvania follows the 'first in time, first in right' principle for lien priority. The first mortgage recorded in the county recorder of deeds office takes priority over subsequently recorded liens, with limited exceptions such as mechanics' liens.
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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.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
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