Prior Lien

AAA

DEFINITION of 'Prior Lien'

A lien that is recorded prior to any other claims. Prior liens must therefore be paid before any other claims in the event that the collateral that is pledged against the loan must be liquidated. Junior liens are subordinated to prior liens.

INVESTOPEDIA EXPLAINS 'Prior Lien'

A primary mortgage is an example of a prior lien. This mortgage will be paid off before any second or third mortgages, or lines of credit. A perfected security interest is also considered a prior lien.

RELATED TERMS
  1. Property Lien

    A property lien is a legal claim on a tract of real estate granting ...
  2. Non-Possessory Lien

    The legal claim against an asset in order to secure payment of ...
  3. Perfected Lien

    A security interest in the collateral that is used to secure ...
  4. Encumbrance

    A claim against a property by another party. Encumbrance usually ...
  5. Collateral

    Property or other assets that a borrower offers a lender to secure ...
  6. Lien

    The legal right of a creditor to sell the collateral property ...
Related Articles
  1. Are my IRAs secure against possible ...
    Retirement

    Are my IRAs secure against possible ...

  2. Holding Titles On Real Property
    Retirement

    Holding Titles On Real Property

  3. How Does A Reverse Mortgage Work?
    Retirement

    How Does A Reverse Mortgage Work?

  4. Do payday loans hurt my ability to get ...
    Credit & Loans

    Do payday loans hurt my ability to get ...

Hot Definitions
  1. Return On Sales - ROS

    A ratio widely used to evaluate a company's operational efficiency. ROS is also known as a firm's "operating profit margin". ...
  2. Halloween Strategy

    An investment technique in which an investor sells stocks before May 1 and refrains from reinvesting in the stock market ...
  3. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  4. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  5. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  6. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
Trading Center