Which type of mortgage is subordinate to the claims of other recorded mortgages?

The correct answer, a junior mortgage, refers to a type of mortgage that is subordinate to other mortgages recorded against the same property. This means that in the event of foreclosure or a sale of the property, the claims of the junior mortgage lender will be paid only after the claims of the senior mortgage lenders have been satisfied.

Junior mortgages are often taken out in addition to a primary mortgage to help the borrower access additional funds. However, because they are in a subordinate position, they carry a higher risk for the lender. This higher risk may result in higher interest rates compared to primary or senior mortgages.

In this context, a jumbo loan refers to a type of mortgage that exceeds the conforming loan limits set by government-sponsored entities but does not specifically relate to its position relative to other mortgages. An installment loan is a broader term that represents loans paid back in fixed installments over time, but it does not specifically address mortgage subordination. An insured closing letter is not a type of mortgage but rather a document used in the closing process that provides a guarantee of funds related to a mortgage transaction. Thus, the junior mortgage is the only choice that clearly indicates a position subordinate to other recorded mortgages, making it the correct response.