Junior mortgage


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Related to Junior mortgage: Purchase Money Mortgage

Junior mortgage

A mortgage that will be satisfied only after more senior mortgages have been satisfied. E.g., a first mortgage will be satisfied prior to a second or a third mortgage.

Junior Mortgage

A mortgage secured by a lien on a property that is subordinate to another mortgage on the same property. One may take out a junior mortgage to pay for home repairs or for any number of other reasons. A junior mortgage carries a higher interest rate than a primary mortgage because the lien is less secure. A second mortgage is a junior mortgage, as are third and fourth mortgages. See also: Piggyback mortgage.
References in periodicals archive ?
09) is the estimated value of the loan assumption, including the effect of the junior mortgage required to make the purchase possible.
The spreadsheet model was used to test the sensitivity of assumption financing, including a junior mortgage, to variation in the interest rate spread between conventional first mortgages and junior mortgages, loan-to-value ratio, and the price paid for the property.
Also, it should be noted that the value of the assumed loan reaches the $14,383 amount calculated ignoring the junior mortgage only when the junior mortgage effect is reduced to zero (A/P ratio = 80% of price, loan-to-value ratio = 0.
However, measures of assumable financing value that have ignored the need for a junior mortgage to bridge the gap between the assumable loan amount and the buyer's equity overestimate the value of assumable financing.
A spreadsheet model also provides a convenient way to test the sensitivity of the assumption financing value to changes in the financial market and real estate market conditions (such as the interest rate spread between conventional first mortgages and junior mortgages, loan-to-value ratio, and the price paid for the property).
The dividend policy and earnings guidance are being reaffirmed because the Company does not expect further material widening of the spread differential between LIBOR and mortgages and junior mortgage securities.
Although such junior mortgages may be seen as a desperate measure for cash-strapped homeowners, they can provide benefits to both the borrower and the lender.
Loan group II consists of fixed-rate, closed-end home equity loans with CLTV ratios up to 125% secured by first, second, or more junior mortgages or deeds of trust on residential properties and adjustable-rate first lien mortgage loans with initial interest-only periods.
Loan group II consists of fixed-rate, closed-end home equity loans and adjustable-rate home equity lines of credit with CLTV generally 1) up to 100% and 2) over 100% and up to 125%, secured by first, second or more junior mortgages or deeds of trust on residential properties.

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