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If you are a private lender in need of legal assistance with a subordination agreement, the subordination agreement lawyer in Orlando, Florida may be able to help you. A subordination agreement is a contract that prioritizes one debt obligation over another. When might a subordination agreement be required? Multiple debts or liens can be levied against a home. For example, a person may have a first mortgage, a second mortgage, and a person may even have tax lien. Tax liens always have priority over a first or second mortgage. Generally, the first mortgage will have priority over a second mortgage because the first mortgage was taken out first. However, there might be certain instances where a second mortgage could legally have priority over a first mortgage, and this is where a subordination agreement might be useful.
Let’s say an individual has a second mortgage on their home and you are a lender paying off the first mortgage. Legally, the older debt (the second mortgage) would have priority over a newer debt (your loan to refinance the first mortgage). However, as a lender, one of your protections is the right to foreclose and collect the money from the sale of a home to pay off the first mortgage debt. What lenders might do in this situation is ask that a subordination agreement be placed on the second mortgage, ensuring that the new loan receives priority over the other loans should the home ever go into foreclosure.
Essentially, when it comes to subordination agreements, it is key to remember two things. Older liens generally get priority when it comes to foreclosed homes, and if you are refinancing your mortgage, and have a second mortgage, a subordination agreement may be required to protect the lender offering the refinancing. If you are lending money to an individual to refinance their mortgage, it is important to protect your rights. If you want your lien to have priority over older liens on the home, you may need to put a subordination agreement in place. Legal Counsel, PA employs a subordination agreement lawyer in Orlando, Florida who may be able to help you if you need help with your loan contracts and other legal documents related to a private loan. Have questions? We have answers. Contact Legal Counsel, PA at 407.982.4321.
Subordination Agreements with Business Debts in Orlando, Florida
Subordination agreements don’t appear only in mortgages and second mortgages, but they may also apply to business debts. If you are considering lending money to a business or to a friend or family member for their start-up, you may want to consider how other debts could impact your right to be repaid. Again, older business debts may take priority over a newer business debt. So, if you are lending a friend, family member, or colleague money to buy real estate, office space, equipment, or to raise start-up capital, it is important to understand whether the individual has other debts that have priority and to determine whether you might want to ask for a subordination agreement on the other debt so that your claim has priority. If you are planning to lend money to a small business or you are a private lender looking to lend money to a business, you may be considering whether a subordination agreement is right for you. Legal Counsel, PA employs a subordination agreement lawyer in Orlando, Florida who can help you understand how an individual’s older debts can impact your claims and what steps you might be able to take to protect your rights.
Sometimes businesses might put subordination agreements in place on certain debts in order to restructure their debt obligations. If you are thinking of restructuring your business debts, it is important to get legal advice. Legal Counsel, PA employs a subordination agreement lawyer in Orlando, Florida who may be able to assist you with your business and loan contracts. Have questions? We have answers. Contact Legal Counsel, PA at 407.982.4321.
Lending Money? Understand How Subordination Agreements May Be Able to Help You
If you are lending money to another person or party in Orlando, Florida, understanding how the borrower’s other debt obligations can impact your rights is important. Other debt obligations can make your loan riskier. One way to mitigate this risk is to have a subordination agreement in place. Legal Counsel, PA employs a subordination agreement lawyer in Orlando, Florida who may be able to help you with your loan contracts so that they can best protect your rights. Contact our firm today to learn more about our private lender services. Have questions? We have answers. Contact Legal Counsel, PA at 407.982.4321.