Second line: "Understanding First Lien Mortgages"

A

The correct answer is A. First mortgage.

A first mortgage is a mortgage that has priority over all other liens on a property. This means that in the event of a foreclosure or sale of the property, the first mortgage lender has the first claim to the proceeds from the sale.

In contrast, a second mortgage, also known as a home equity loan, is subordinate to the first mortgage and has a lower priority in the event of a foreclosure or sale of the property.

Callable debt refers to a type of bond or loan that allows the issuer to redeem it before its maturity date. This is usually done when interest rates have decreased, allowing the issuer to save money by issuing new bonds or loans at a lower interest rate.

A fixed-rate mortgage is a type of mortgage where the interest rate remains the same throughout the life of the loan. This is in contrast to an adjustable-rate mortgage where the interest rate can change over time.

A graduated payment mortgage is a type of mortgage where the payments start low and increase over time, usually in five-year increments. This type of mortgage is designed for borrowers who expect their income to increase over time, making it easier to manage their payments.