Nova Scotia Real Estate Practice Exam 2025 – The Complete All-in-One Guide to Ace Your Licensing!

The type of mortgage that is typically considered second in priority is the equitable mortgage. In lending and real estate, the priority of mortgages refers to the order in which claims against a property are settled in the event of foreclosure.

An equitable mortgage is generally established through an agreement that may not be formally registered with the land registry but still provides the lender with an interest in the property. This kind of mortgage takes a second position behind a legal mortgage, which is usually the first mortgage on the property secured by a formal registration process.

Understanding the different types of mortgages and their priorities is crucial in real estate transactions, as it affects the rights of each lender in the event of default. In this context, an equitable mortgage being second in priority means that if the property were to be sold to satisfy debts, the lender with the equitable mortgage would be paid after the first mortgage lender. This has implications for risk assessments, potential recovery amounts, and the overall financing structure involved in real estate transactions.

In contrast, the other types of mortgages mentioned don't specifically denote a second priority position as equitably as equitable mortgages do. For instance, chattel mortgages pertain to personal property, while conventional mortgages typically refer to standard primary loans used to finance home purchases,