First Mortgage Position

First Mortgage

A first mortgage is the primary loan that pays for a piece of real estate, and it has priority over all other liens or claims on the property. If the property is sold or if the borrower defaults, the first mortgage lender is paid before any other mortgage lender’s lien on the property. Should the borrower default, the lender would foreclose on the property, then sell it to recoup its investment.

Deeper Definition

Usually, the loan used to purchase the property is secured by the first mortgage. When you obtain a mortgage loan you will sign a promissory note, or a promise to repay the amount borrowed, according to the terms of the note.

You will also sign a mortgage, giving the lender a lien, or security on the property. In the event you do not pay back the loan or not follow the terms of the contract, the lender, through the mortgage, is given the right to sell the property to complete repayment of the note. As the first lien, the primary mortgage lender would be first in line to be paid from the proceeds of a foreclosure auction. Lenders of home equity loans or lines of credit are secondary to the primary mortgage lender.

The ‘first’ in first mortgage refers to the position of the lien against the property, not the first house the home buyer has purchased.

First mortgages are different from second mortgages, which are secondary loans taken out against the available equity. Second mortgages are typically for refinancing purposes, such as obtaining a lower interest rate, converting to a shorter-term mortgage, or to obtain more money for home improvements, etc.

Become a First Mortgage Lender

As investors, we know that the most important thing to you – even more important than your return on investment – is the return of your investment. You don’t want to throw your money away.

This is why we make certain that our properties are insured title insurance, hazard insurance, and investment insurance. All transactions are made through a title company. Our private money lender for the property holds the first mortgage position. The real property itself is backing the investment. If anything happens to us, the private money lender would be able to sell the property.

“But is it worth it?” you ask. “What kind of returns are you offering?”

Right now, our private money lenders earn up to 37% in profit. Why this drastically large payment when we could get money much cheaper from the bank?

In order to seize the best deals on the market, the ones that will make a profit, we must be able to pull the trigger at a moment’s notice. We can get money easier and faster from a private money lender than from a bank any day. Our private money lenders are so valuable to us that we’re happy to pay a much higher ROI than the stock market and most other places where you could invest your money.

If you’d like to be one of our private money lenders, fill out our contact us form and we'd be happy to call or meet with you.