What type of contract gives a mortgage recorded later priority over a previously recorded mortgage?

A subordination agreement is a legal document that allows a later recorded mortgage to take priority over a previously recorded mortgage. This means that in the event of a foreclosure, the holder of the later mortgage would be paid first, even though their mortgage was recorded after the earlier one.

This type of agreement is often used when a borrower wishes to refinance a property and obtain a new loan that is subordinate to the existing mortgage. By doing so, it facilitates the refinancing process and allows the borrower to take advantage of potentially better terms from the new lender.

The other types of agreements listed do not serve this purpose. A consolidation agreement refers to the combining of several debts into one, which does not alter the order of precedence among mortgages. A priority agreement and priority of liens are not established legal terms in this context and do not specifically address the subordination of mortgages. The key feature of a subordination agreement is its ability to alter the priority of mortgage claims, making it the correct choice in this scenario.