Whether you are looking for a home or you are already a homeowner trying to refinance or sell, you may discover that a property has a lien placed on it. What is a lien? A lien on a house is a legal claim against your property. It gives creditors a stake in your real estate and a way to collect debts owed to them. Don’t let this information scare you away from owning, selling or refinancing your home. Learn how you can handle a lien on your property with some of the tips below.
Why might there be a lien on a property?
A lien is placed on a property when money is owed to someone – whether it be private parties or the government. When money is owed on your property, the parties involved will notify your mortgage lender and the property owner stating there is a balance owed. Placing a lien on a property is a process that involves legal procedures, meaning if you are a homeowner; a lien placed on your property will not come as a surprise. Liens result from an unpaid bill or tax, and are often battled against in court. If you do lose in court, and you still have not paid the debt owed, a lien can be placed on your property.
How do I find out if a property has a lien on it?
Good News! There are multiple, easy ways to find out if there is a lien on a property. You have a few options:
- Ask your title company. Title companies are great allies. They ensure that there are no liens on a property by conducting a title search, uncovering a home owner’s history. However, if one is discovered, the title company will let you know and be more than willing to help resolve the issue. Title companies also issue insurance; protecting buyers from the potential future costs of unforeseen title defects.
- Go to your county courthouse or recorder. This is the best option if you are looking to talk to someone about a lien. If you come up with any questions while you are there, do not be afraid to ask them – they are there to help you!
- Look up your property online through the county recorder or clerk. In many jurisdictions you are able to look up a property online through the recorders or clerk’s office and check for liens. Although this is one of the quicker routes to finding out this information, there could be chance the database does not have the information you need. Going into the office may take a little longer, but you will be able to collect any and all necessary information.
What happens if a lien is discovered?
If the property that you are going to buy has a lien on it or filed against it, your mortgage lender will require that it is cleared up before or during closing. Liens need to be cleared before issuing title insurance. Lender’s title insurance protects the lender against loss from liens that were not detected before closing, and likewise owner’s title insurance does the same for the new owner. Established title companies have been through the home buying process countless times, therefore are knowledgeable resources, and will ensure that any liens the seller may have are cleared before their property is sold. Reach out with any questions or concerns. View them as a lien-seeking hero!
We hope this information has been useful to whether you have begun your search for a new home or are hoping to refinance or sell your home. Do you have any questions about these tips? Contact Mutual Title today.
Disclaimer: This article is intended to provide general information and is not to be considered legal advice. Consult your attorney for more information regarding your personal situation.