What is the difference between a primary and secondary mortgage?

A primary mortgage is a loan that is used to purchase a home. The bank or other financial institution takes a lien on the property and is the first one to be repaid when the loan is paid off. A secondary mortgage is a loan that is secured by the equity in a home. This means that the lender takes a lien on the home to secure the loan. The lender has the right to sell the home if the borrower fails to make payments on the loan. Primary mortgages are typically used when a borrower is purchasing a home. The loan is taken out to purchase the property and the lender holds a lien on the home until the loan is paid off. The loan is usually taken out over a long period of time and the borrower makes regular payments to the bank in order to pay off the loan. Secondary mortgages are typically used when a borrower has built up equity in their home. The equity is used as collateral for the loan and the lender holds a lien on the property until the loan is paid off. The loan term is usually much shorter and the borrower makes regular payments to the lender in order to pay off the loan. In summary, a primary mortgage is used to purchase a home while a secondary mortgage is used when a borrower has built up equity in their home. The lender holds a lien on the property in both cases and the borrower makes regular payments to the lender to pay off the loan.

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What is the difference between a primary and secondary mortgage?

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