Mortgage Types in United States

Practical Information

Note: Some of this information was last updated in 1982

More about mortgage in U.S. law here.

First Mortgage

The first (in time or right) of a series of two or more mortgages covering the same property and successively attaching as liens upon it; also, in a more particular sense, a mortgage that is a first lien on the property, not only as against other mortgages, but as against any other charges or encumbrances.

Second Mortgage

One that takes rank immediately after a first mortgage on the same property, without any intervening liens, and is next entitled to satisfaction out of the proceeds of the property.

Purchase Money Mortgage

A mortgage given in part payment of the purchase price of the property. The deed and the purchase money mortgage are executed simultaneously. The grantee in the deed is the mortgagor; the grantor in the deed is the mortgagee. All names and descriptions of property in the purchase money mortgage must agree with those in the deed. A purchase money mortgage has certain priorities that other mortgages do not have. It also has priority over existing judgments and other debts of the mortgagor. On the other hand, as a rule, the mortgagee cannot get a deficiency decree against the mortgagor when he or she forecloses a purchase money mortgage, which the mortgagee cannot usually get under other mortgages.

Open End Mortgage

A mortgage contract (it may be a purchase money mortgage) allowing the borrower to reborrow up to the amount of the original loan. For example, when a loan has been reduced several thousand dollars, at the lender’s option, the borrower may reborrow up to the amount that has been paid ahead. See also blanket mortgage (in U.S. law).

(Revised by Ann De Vries)

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