Becu Subordination Agreement
A Becu Subordination Agreement is a legal agreement that is made when you are refinancing your home, and you have a second mortgage or home equity line of credit. Subordinating a mortgage means that the lien holder agrees to take a lower ranking position in terms of getting paid in case the borrower defaults on their loan. In simpler words, a subordination agreement rearranges the priority of creditors.
When you refinance your home, the new lender will want to be first in line to get paid if you default on your mortgage payments. If you have a second mortgage or a home equity line of credit, that lender will also want to be paid first. But there can only be one first lienholder, so the second lender will have to agree to take a secondary position.
This subordination agreement is an essential part of the refinancing process because it allows the new lender to approve your refinance application without having to pay off the second mortgage or home equity line of credit. It also ensures that the second lender will get paid if you default on your payments.
The subordination agreement specifies the terms and conditions under which the second lender agrees to subordinate its lien to that of the new lender. It may include details such as the exact amount of money owed to the second lender, when and how payments will be made, and what happens in case of default.
If you have a second mortgage or home equity line of credit and are considering refinancing your home, it is essential to understand how a subordination agreement works. You should consult with a real estate attorney or an experienced mortgage professional who can guide you through the process.
In conclusion, a Becu Subordination Agreement is a legal agreement that allows a new lender to take first place in the priority of payment if the borrower defaults on their loan. It is vital to understand how it works to ensure a smooth refinancing process and protect your rights as a homeowner.