What Is A Lien On The House?
What Is A Lien On The House?
A lien is a legal claim against property that can be used as leverage to repay a debt. Liens can be placed on real estate, such as homes, or personal possessions, such as cars and furniture.
Depending on the type of debt owed, the lien will determine how long the property can be used for collateral until it must be released.
While there are several types of liens including tax liens and judgment liens, there are also voluntary liens that can be set up with consent from both parties.
How Do Property Liens Work?
Property liens are a powerful legal tool that enables creditors to secure payment from debtors who have failed to keep up with their payments. A lien is a claim of ownership attached to the property and it lasts until the debtor pays off their debts in full.
The court grants the creditor permission to file a lien against the debtor’s assets, which will then be held against them as collateral until they make all necessary payments.
Liens are filed with the county office and sent to the property owner advising them of repossession of the asset(s) should payment not be received in full.
These liens remain on public records for years, even after payments have been made, so it is essential that debtors pay off their debts in full and on time to avoid further complications or additional costs down the line.
Can You Have A Lien On Your House From A Previous Owner?
No. It is uncommon for someone to buy a house with an existing lien and most sellers clear up any liens before listing to avoid complications. Although it may be possible for a buyer to take over a lien, it is unlikely that they would find a lender willing to finance the purchase.
However, some circumstances may exist in which the lien remains with the property and becomes the responsibility of the new owner, such as when a home is purchased through foreclosure or auction.
How Do You Know If There’s A Lien on Your House?
You can find out if there is a lien on your house by going to your local secretary of state or county clerk who holds property records information.
This information can usually be found online and will provide details about any possible liens that may have been placed on your home.
How Long Is A Lien On Your House In Effect?
When a home is purchased with a mortgage, a lien is added to the property and remains in effect for as long as the loan does.
If the bank that granted the original loan has gone out of business and another bank has purchased its assets, one should contact this previously established bank to get a lien release.
In such cases, the Federal Deposit Insurance Corporation (FDIC) may also be able to provide assistance. Overall, any lien on your house will remain in effect until it is released by an appropriate authority such as mentioned above.