Which of the following best describes a first mortgage?

A first mortgage is defined as the mortgage that is recorded first against a property in the public records. This designation gives it priority in terms of claims against the property in the event of default. If a borrower defaults and the property goes into foreclosure, the first mortgage lender is the first to be paid from the proceeds of the sale, ahead of any subsequent liens or mortgages.

This priority status is crucial for lenders because it minimizes their risk. If a property has multiple mortgages, the first mortgage takes precedence over others, meaning it is the first in line to recover funds in a foreclosure situation. Other factors such as interest rates, repayment periods, or refinancing options do not dictate whether a mortgage is classified as a first mortgage.

Understanding this hierarchy and its implications is essential for both borrowers and real estate professionals, as it affects loan terms, conditions, and overall financial planning related to real estate transactions.