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First Mortgage

Definition - What does First Mortgage mean?

The term "first mortgage" refers to the loan taken for the purchase of real estate, in which the property is used as collateral for securing the loan. In this case, the lender has some kind of security in the real property being purchased.

Justipedia explains First Mortgage

In case the borrower fails to act on the agreed terms—for example, he/she doesn’t make the payment—then the lender may sell the property to get back the amount owed. First mortgage is used to finance property while second mortgages are for refinancing purposes.

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