Real estate title glossary
What is subordination agreement?
Definition
A subordination agreement is a recorded agreement by which a lienholder accepts a lower priority than another lien, usually so a new first mortgage can be placed ahead of an existing second loan.
Liens normally rank by recording date. Refinancing a first mortgage while a home equity line stays open typically requires the line's lender to subordinate.
How it shows up in a title search
A search reads subordinations to rank open liens correctly; without one, a new loan recorded later is junior to the old line.
Guides that go deeper
- Is That Mortgage Actually Open? Satisfactions, Assignments and CEMAsA recorded mortgage never leaves the record. Only a satisfaction closes it, an assignment does not, and a CEMA hides old mortgages inside a new one.
- What Is an Encumbrance on Property? Meaning, Types and ExamplesWhat an encumbrance means in real estate, the main types (mortgages, liens, easements, restrictions, leases), how they differ, and how to find them on a property.
- Lien on a House: What It Means for Owners and Buyers, and How It Gets RemovedA lien on a house is a creditor's legal claim against it. Learn the main types, how a lien affects selling and refinancing, and how liens are released.
Related terms
Book and pageAssignment of mortgageMERS (Mortgage Electronic Registration Systems)Payoff statementCode enforcement lienUCC fixture filingCC&Rs (covenants, conditions and restrictions)Lien priorityAll terms
Source: Legal Information Institute, Wex: subordination. Plain-English summary of general US usage; state law varies, and this is not legal advice.