What type of lien is placed on a property after a previous lien has been recorded?

A junior lien is a type of lien that is placed on a property after a previous lien has already been recorded. In the hierarchy of liens, the first lien recorded generally holds priority over any subsequent liens, meaning that if the property is sold or foreclosed, the first lien must be satisfied before any junior liens receive payment. This can significantly affect the recovery of funds for the holders of junior liens, since they are paid after the more senior liens have been resolved.

The concept of junior liens is particularly pertinent in real estate finance, as it reflects the order of claims against a property and indicates the risk associated with different types of debt. Understanding this hierarchy can help investors and property owners make informed financial decisions regarding equity, refinancing, and potential financing operations.