A first mortgage is the primary lien on a property — the loan that holds the highest priority position among all debts secured by the property. In the event of foreclosure, the first mortgage holder is paid before any junior lienholders (such as a second mortgage, HELOC, or judgment lien). This priority position makes first mortgages the least risky for lenders, which is why they typically carry the lowest interest rates among property-secured debts.
Lien priority is generally determined by the order of recording — the first mortgage recorded with the county has priority over all subsequently recorded mortgages. This is known as the "first in time, first in right" principle. However, certain liens have statutory priority that can supersede recording order: property tax liens and some government liens take priority over all other liens, regardless of when they were recorded. Mechanic's liens may also take priority from the date work commenced, which could predate a mortgage.
The distinction between first and second mortgages matters for several reasons beyond foreclosure. First mortgages typically have lower interest rates because of their priority position. They often have more favorable terms, longer repayment periods, and higher borrowing limits. And from a title insurance perspective, the lender's title insurance policy specifically insures the first mortgage holder's priority position — protecting against the risk that an unknown prior lien could claim priority.
Subordination agreements can change the priority order. When a homeowner refinances their first mortgage while keeping a second mortgage or HELOC in place, the new first mortgage would normally record after the existing second mortgage and take a junior position. A subordination agreement from the second mortgage holder allows the new first mortgage to maintain senior priority — keeping the second mortgage in its junior position.
At closing, the title company ensures the first mortgage is properly recorded in the correct priority position. The title search identifies all existing liens, and any that would take priority over the new mortgage must be resolved before the lender will fund the loan. At Beycome Title, we coordinate all lien payoffs, subordination agreements, and recording to ensure your lender's mortgage holds the intended priority. Get your free closing estimate.