Are you in the process of applying for your first mortgage? Or perhaps you've discovered that an estate tax lien has been placed on your property. Whatever the case, as a property owner, it's important to understand as much as possible about real estate liens.
A property lien is a legal claim placed on a property by a creditor as collateral for an outstanding debt or payment owed. Property liens can arise from various sources, such as unpaid taxes, a mortgage, or a contractor's unpaid bills.
In this article, we will discuss the different types of real estate liens and their implications. Keep reading to learn more.
One of the most common types of real estate liens is a tax lien. Tax liens can arise from unpaid property taxes, income taxes, or other taxes owed to a government entity. A tax lien can be filed against a property by the IRS or a state or local government agency.
Tax liens can impact an individual's credit score and make it difficult to sell or refinance a property until the lien is paid.
Another common type of property lien is a mortgage lien. A mortgage lien is a legal claim placed on a property by a lender as collateral for a mortgage loan.
This type of lien gives the lender the right to foreclose on the property if the borrower defaults on the loan. When a mortgage lien is paid off, the lender releases the lien, and the property becomes free and clear of the lien.
A judgment lien is a legal claim placed on a property by a creditor who has won a judgment against the property owner. Judgment liens can arise from unpaid debts, such as credit card debt or medical bills. This type of lien can impact an individual's credit score and make it difficult to sell or refinance a property until the lien is paid.
A mechanics lien is a legal claim placed on a property by a contractor, subcontractor, or supplier for unpaid bills related to work done on the property. Mechanics liens can arise from various construction-related projects, such as home renovations or building a new home.
If a mechanics lien is not paid, the contractor or supplier can file a lawsuit against the property owner to enforce the lien.
An HOA lien is a legal claim placed on a property by a homeowner's association (HOA) for unpaid dues or fines. HOA liens can impact an individual's credit score and make it difficult to sell or refinance a property until the lien is paid.
In some cases, an HOA can foreclose on the property if the lien is not paid.
It's no secret that real estate legal matters can be complicated. Fortunately, this guide to the different types of property liens will help you be an informed property buyer and owner.
Please contact us today to schedule an appointment with one of our real estate professionals.
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