A South Carolina Subordination Agreement Subordinating Existing Mortgage to New Mortgage is a legal document used to establish the priority of two mortgages on a property. When a borrower wishes to refinance their existing mortgage or take out a new mortgage loan, lenders may require a subordination agreement to ensure the new mortgage takes priority over any existing ones. In South Carolina, there are various types of subordination agreements that can be used depending on the circumstances: 1. First Mortgage Subordination Agreement: This is the most common type of subordination agreement where an existing first mortgage is subordinated to a new mortgage. It means that if the borrower defaults on their loan, the new mortgage lender has the first claim on the property. 2. Second Mortgage Subordination Agreement: In cases where a homeowner has an existing second mortgage, such as a home equity loan or a home equity line of credit (HELOT), a subordination agreement can be used to prioritize the new mortgage over the second one. 3. Third or Lower Mortgage Subordination Agreement: Occasionally, properties may have multiple mortgages, and when refinancing or obtaining a new mortgage, all the existing mortgages must be subordinated to the new loan. This type of subordination agreement ensures that the new mortgage takes priority over all existing mortgages, including second or third mortgages. 4. Commercial Mortgage Subordination Agreement: In the context of commercial properties in South Carolina, a subordination agreement may be used to prioritize a new commercial mortgage over any existing mortgages on the property. 5. Construction Loan Subordination Agreement: If a borrower wishes to obtain a construction loan to finance the building of a property, and there is an existing mortgage on the land, a subordination agreement can be used to subordinate the existing mortgage to the construction loan. This ensures the construction loan lender has priority during the construction process. South Carolina Subordination Agreement Subordinating Existing Mortgage to New Mortgage is a crucial legal document that protects the rights and interests of lenders and borrowers during the process of refinancing or obtaining new mortgage loans. By clarifying the priority of mortgages on a property, all parties involved can ensure a smooth and secure transaction.
South Carolina Subordination Agreement Subordinating Existing Mortgage to New Mortgage
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Many people have a subordinate mortgage in the form of a home equity line of credit or home equity loan. A subordinate mortgage is secured by your property but sits in second position, if you have a primary mortgage, for getting paid in the event you default.
Many people have a subordinate mortgage in the form of a home equity line of credit or home equity loan. A subordinate mortgage is secured by your property but sits in second position, if you have a primary mortgage, for getting paid in the event you default.
Getting A Second Mortgage A second mortgage will become a subordinate loan. If you repay the primary loan within the term of the second mortgage, the second mortgage can take its place as the primary loan.
A subordinated loan is debt that's only paid off after all primary loans are paid off, if there's any money left. It's also known as subordinated debt, junior debt or a junior security, while primary loans are also known as senior or unsubordinated debt.
A subordination agreement must be signed and acknowledged by a notary and recorded in the official records of the county to be enforceable.
Any subsequent loan that is taken out after your initial purchase loan is considered to be a junior-lien or subordinate mortgage. Therefore, subordinate financing is the use of two or more mortgages to finance the purchase of real estate or using your home's equity for liquid cash.
Subordination clauses are most commonly found in mortgage refinancing agreements. Consider a homeowner with a primary mortgage and a second mortgage. If the homeowner refinances his primary mortgage, this in effect means canceling the first mortgage and reissuing a new one.
Again, if you're refinancing your first mortgage and the property also has a subordinate mortgage, the refinancing lender will usually handle the process of getting the necessary subordination agreement. But you need to ensure that the required subordination agreement is completed before the new loan's closing date.