If you are a home buyer or homeowner, understanding liens is vital. In fact, they
could impact your ability to buy a specific house or make a home cost more.
The favorable news is that finding out if a property has a lien against it is simple. It
is also simple to settle a lien once one is in place.
Below are questions people usually have regarding liens. Q: What is a mortgage lien? A lien is a financial claim against a home that gives lenders a right to your property if you do not pay back your debt. . It means the owner owes an entity money, and unless the debt is settled, the debtor can seize
the asset to cover the unpaid balance. There can also be tax liens against the
property when the owner doesn’t pay their taxes.
Q: Can you still buy a home if it has a lien?
A: It is possible to purchase a home that has liens against it, but there are risks
involved. More than likely, a lender will not approve a loan until the lien is settled.
Q: Should you avoid a home with a lien against it?
A: If a property that has caught your attention has a lien against it, the line will need
to be settled before buying it. You have an option to pay the lien off yourself as part
of the purchase. In many cases, the seller can use the net proceeds to settle them
at closing. There are times that the seller will pay the lien before closing to prevent
from the transaction from going sour and/or to honor the closing date.
Q: Are there ways to protect yourself?
A: Yes, you have several options; a.) ask your realtor to find out if the title company
you will be using to close on your property will conduct a title search; b.) contact
the title company directly yourself to obtain information. A title company will be
able to do a title search and identify any liens against a home you’re interested in. c.) You can also purchase title insurance, which protects you if any unknown liens
surface later after the purchase.