What is a mortgage?

What is a mortgage?

A mortgage is a security interest in an existing property (land, building, house, etc.), allowing the lender to seize the property on its behalf in case of default.

The mortgage can be first or second rank, the rank indicating the order of priority of the creditors for the repayment.

A first rank mortgage ensures that the creditor will be reimbursed first in case of default. In effect, this means that the creditor will be the first to be paid by the notary once the funds are available. When a creditor takes out a mortgage on a property that is already mortgaged, this is known as a second mortgage, and the creditor will have to wait for the first mortgage to be repaid before he can be repaid.

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Updated on: 05/04/2022