What is a mortgage that has priority over all other liens?

A mortgage that has priority over all other liens is known as a first mortgage. This type of mortgage is the primary loan secured by the property, meaning it has the first claim on the property in the event of foreclosure or loan default. Because it has the highest priority, creditors who hold this type of mortgage are first in line to be repaid from the proceeds of the property sale, which adds a significant level of security for the lender.

In a scenario where multiple mortgages or liens exist on a property, the first mortgage will always take precedence. This priority can affect both the interest rates that lenders offer and the risk involved in lending. Knowing that a first mortgage stands first in the hierarchy is crucial for both lenders and borrowers when assessing loan options and understanding the implications of securing additional financing.

The other choices represent forms of financing that come after the first mortgage, and therefore, they carry more risk for lenders because they are subordinate to the first mortgage.