Junior Mortgage

A junior mortgage or lein is a type of mortgage that is subsequent to another that has precedence in acquisition and can be considered lower in the repayment rank. The lein priority is another factor to take into account when considering this type of loan. This loan is like a first mortgage in that it is secured using the value of the real estate, but the interest rate
 is usually higher with a shorter term than the initial mortgage.

Some people inquire to obtain a junior mortgage so they may obtain a supplementary
down payment or even funds for the close of the deal. Additionally, borrowers may also
want this type of loan as a way to gain access to their properties equity.

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Various requirements of the lender must be met in order to secure a junior mortgage.
The capacity of the borrower to repay the new debt in addition to the first loan is a major deciding factor for the lending institution. This is because the primary mortgage takes precedence and the lenders risk for losing funds is higher if the debtor defaults on the loan. Another risk is that of a foreclosure when payments can not be made. But junior mortgage holders can financially inhibit the first mortgage foreclosure. Additionally if a forclosure is initiated by a higher mortgage, it could be a threat to the trust deed security. Also the holder who does not joininthe action further risks losing any proceeds that remain after the senior loans have been paid.These risk factor causes various lenders to be more careful in granting these loans.

Another surety about a  junior mortgage, is that some called it a second mortgage, but regardless of the name the fact remains that this is but one of several types of mortgages available today and you are sure to find one to you liking and that will fit your individual situation.