Junior

Junior is a term that signifies that which is younger or lower in rank or position, and is commonly used in the financial world. A junior is subordinate to all other claims, rights or interests. Junior is usually the opposite of senior. A junior lien or junior mortgage, for instance, is one that takes a subordinate rank to a prior lien or mortgage. This means that the junior lien or junior mortgage will not be paid off until the previous lien has been satisfied and paid in full. Often borrowers will use junior mortgages to obtain additional funds in order to make a down payment or to take care of closing costs. Because a borrower will have little or no equity in the property being mortgaged, lenders tend to discourage junior financing. Another case of junior is junior refunding. Junior refunding is the issuance of new securities that will be used to refinance government debt that matures between one and five years. Frequently junior refunding involves the exchange of intermediate-term government bonds for long-term government bonds. There is also junior debt, which is either unsecured or has a lower priority than that of other claims on the same asset or property. Junior debt is also called subordinated debt. An example of junior debt is a junior mortgage. Finally, there is the junior executive. A junior executive is often an entry level management position.