Subordination agreement form 2025

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The document is a Subordination Agreement between a property owner and a beneficiary, which establishes that the owner's existing security interest in the property will be subordinate to a new loan secured by a deed of trust in favor of a lender. This agreement allows the lender to provide an additional loan to the owner, ensuring that the lender's lien takes priority over the beneficiary's existing lien. The document outlines the conditions and mutual benefits for all parties involved.

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Click ‘Get Form’ to open the subordination agreement in the editor.
Begin by filling in the date at the top of the form, indicating when the agreement is made.
In the first section, enter the name of the property owner and their address. This identifies who is entering into the agreement.
Next, provide details about the existing deed of trust, including the amount secured and its recording information. This establishes what is being subordinated.
Fill in information regarding the new loan from the lender, including loan amount and terms. This shows what will take priority after subordination.
Ensure all parties involved sign where indicated, confirming their consent to the terms outlined in this agreement.
Finally, complete any notary acknowledgment sections as required to validate your document legally.

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Got questions?

We have answers to the most popular questions from our customers. If you can't find an answer to your question, please contact us.

Is a subordination agreement recorded before or after the new mortgage?

The first mortgage company needs to be disclosing the subordination fee as paid before closing if they are paying you directly outside of closing and they are requiring your loan to be subordinated as a condition of the loan.

Who are the parties to a subordination agreement?

The Borrower: This is the individual or business that has taken out the loans. The Senior Lender: The current lender having the first rights to any payout in the event of default. The Junior Lender: The lender that will become the senior lender once the subordination agreement comes into effect.

What is an example of a subordination clause?

Subordination agreements ensure that a primary lender will be paid in the event the borrower takes on more debt. As with most legal documents, subordination agreements need to be notarized in order to be official in the eyes of the law.

Who prepares a subordination agreement?

Typically, the new lender will prepare the subordination agreement, working with the subordinating lienholder. In some cases, both parties will sign the agreement but in others, only the subordinating lender will need to sign.

What is required for a subordination agreement?

A subordination agreement must be signed and acknowledged by a notary and recorded in the official records of the county to be enforceable.

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What is a subordination agreement document?

A subordination agreement is a contract that guarantees senior debt will be paid before other subordinated debt if the debtor becomes bankrupt .