A lien on a house is a public record of a legal claim against it due to money owed to creditors. While this may sound daunting, a lien is not necessarily a bad thing. This is because there are different types of liens. For example, if you have a mortgage lien, this is a type of lien on your home. On the other hand, some liens are negative and should be dealt with as soon as possible.
What is a property lien?
A property lien is the legal right or claim on a property that is due to a creditor. Sometimes, liens are just a natural part of having a mortgage, according to Kevin Callender, branch manager and loan originator at Motto Mortgage Direct in Milford, Michigan.
Types of liens
There are many types of liens. Some are voluntary while others are considered involuntary or implied. A mortgage lien can be a voluntary form of lien, which is one of the interests in real estate and mortgage in the case of a customer not paying what is owed on their home. They are called primary mortgage liens because if a second loan is taken – for example, to renovate your home, that second loan becomes the second voluntary lien on the property.
How to remove a mortgage lien
Many liens can be removed by paying the debt to clear the title on the property and filing a request to remove the property lien record, Callender said. “In some other cases, the lien holder may agree to release it if a repayment plan is set up,” but if you believe the creditor is mistaken or that the lien is fraudulent, you can go to the appropriate court and request to remove the lien.
Conclusion
A lien on your home can be voluntary or involuntary. A voluntary lien is not a cause for concern. However, it may limit the things you can do with the home, and may lead to your loss of ownership if not resolved.
Frequently asked questions (FAQs)
What happens if I buy a home that has a lien on it?
Generally, you cannot buy a home with a lien on it because owners are typically not allowed to sell it, and most mortgage companies will not approve a loan for this type of home. If a buyer purchases a foreclosed home, they are responsible for paying off the lien.
How do you know if there is a lien on your home?
Your local secretary of state or county clerk keeps property records and can provide this information. You can usually look this up online.
How long does a lien on your home last?
When you buy a house with a lien, a lien is automatically added and it lasts for the life of the loan. For instance, if you pay off the lien on your home but the original lien bank has closed its business? If the bank went under in the past few years and was bought by another bank, you should contact the second bank. The Federal Insurance Agency may also be able to help you remove the lien in this case.
Source: https://www.thebalancemoney.com/is-it-bad-to-have-a-lien-on-your-house-5193727
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