What is a subsequent mortgage often referred to as?

A subsequent mortgage is often referred to as an equitable mortgage. This term is used because a subsequent mortgage typically arises after a primary mortgage has already been established on the property. It indicates that the borrower has taken on additional financing secured against the same piece of real estate.

In many circumstances, the subsequent mortgage represents a legal claim or interest that is subordinate to the original or primary mortgage. The concept of an equitable mortgage emphasizes that the lender has a right to reclaim the owed amount, although it may not have the same priority as the initial mortgage. This subordination can affect the lender's security interest, leading to complications in foreclosure scenarios if the borrower defaults.

Understanding the terminology surrounding mortgages is crucial in real estate practice, as it helps clarify the rights and responsibilities of both borrowers and lenders within the context of multiple financial agreements tied to a single property.