Lien on house is the most common reason that might decelerate the process of a real estate transaction. What lien on house means is a legal notice as a result of unpaid debt in general. When you are making business, creditors want you to understand that you owe them. So, they may decide to take legal action by putting a lien on your house because it is your biggest asset. A lien can make you feel like having a huge burden on your record. But in the real estate world, it is very widespread than most buyers and sellers know. Either unpaid bills or unpaid taxes usually give rise to a lien. Missed mortgage payments or any other payments owed to the contractor for his/her work on the house can be included in a filed claim against a property. Before a house can be purchased, creditors want payments for the lien.
Types of Liens on Houses
There are several types of liens that can be placed on your house. The three most common lien types are mechanic’s lien, judgment lien, and tax lien. The first one, a mechanic’s lien is when contractors or other repair companies that work on your house, might want insurance to make sure you pay and file a claim on the house. The second one, the judgment lien is if you lose a case that has a judgment against you, the other party of the lawsuit can put a lien until the payment is made. Apart from that when you do not pay your bills an attorney can also put this type of lien on your house. The third one tax lien is when you do not pay taxes, the government might file a lien on house for your debts.
What to Do in Case of a Lien
Liens affect a real estate transaction. But how does it affect? Well, when you want to buy a property and it is arranged for a mortgage, a search for any liens against the property will be made. If there are any liens on the property, it can stop the transaction temporarily. Until the debt is paid off mortgage companies do not finance any property. The responsibility to close a
debt or pay off a lien is on the seller. What to do in case your property has a lien. The first step is to fully understand whether lien on a house is really their responsibility. Sometimes because of the similarities in names may occur. If there is a lien on house you have, you should immediately take action to resolve the issue. Getting in touch with the lienholder is a good start, so you can arrange how to pay the lien off. It is good to have a real estate agent and lawyer for these processes because they will guide you and give useful advice for quick and easy resolutions. If you are a buyer and you want to buy a property at an auction (or something) you should be careful about any liens on hold.