Junior Mortgage


DEFINITION of 'Junior Mortgage'

A mortgage that is subordinate to a first or prior (senior) mortgage. A junior mortgage often refers to a second mortgage, but it could also be a third or fourth mortgage. In the case of foreclosure, the senior mortgage will be paid down first.

BREAKING DOWN 'Junior Mortgage'

Common uses of junior mortgages include piggy-back mortgages (80-10-10 mortgages) and home equity loans. Piggy-back mortgages provide a way for borrowers with less than a 20% down payment to avoid costly private mortgage insurance. Home equity loans are frequently used to extract equity for a home to pay down other debts or make additional purchases. Every borrowing scenario should be carefully and thoroughly analyzed.

  1. Second Mortgage

    A type of subordinate mortgage made while an original mortgage ...
  2. Lien

    The legal right of a creditor to sell the collateral property ...
  3. 80-10-10 Mortgage

    A mortgage transaction in which a first and second mortgage are ...
  4. Home-Equity Loan

    A consumer loan secured by a second mortgage, allowing home owners ...
  5. Loan-To-Value Ratio - LTV Ratio

    A lending risk assessment ratio that financial institutions and ...
  6. Piggyback Mortgage

    A type of mortgage where a second mortgage or home equity loan ...
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