Types of Property Liens You May Be Dealing With

When a person uses their home as collateral in order to secure a loan, the lender will have a lien on that home. There are several kinds of liens that a person may have to deal with regarding his/her property.

Before going into the types of liens, we must first look at how having a lien on your property affects you in general, and if there are any risks associated with someone having a lien on your home or any other asset. Before making a lien on your property, you must also know the consequences of failing to repay the loan. A lien is a legal claim over a property that has been used as collateral for getting money from a person or an organization (the lender). A lien results in the disability of the owner to sell his/her property under normal circumstances since the property cannot be transferred to a third party with a clean title.

When a person is seeking to borrow a large amount of money for any purpose, the lender usually asks for collateral of about the same value as the loan asked by the borrower. A lien can be marked on a car, field, boat or a house – in fact anything that holds significant monetary value in the market. Generally, however, the lender will prefer to mark lien on your house since it increases in value with the passage of time. This will translate into higher sales proceeds, and a chance for the lender to get their money back, with interest.

If there is a lien on your home, the lender has the right to force you to sell your property for the purpose of recouping the debt. This usually happens when the borrower fails to repay the loan. In case the borrower wants to sell his house, he must first repay the loan so that the lien can be cleared. Only after this will the borrower be able to transfer the clean title.

What is My Potential Buyer Thinking?

Now that we have discussed what a lien is and what the implications of having a lien on a property are, let’s look at the same situation from the buyer’s perspective. If you are buying a property, you must check its status and make sure that it does not carry a lien. This can be done by performing a title check on the said property which will let you know if there is a lien on the property. If there is, you cannot acquire the title of the aforementioned property.

There are several types of liens. First of all, there is the Mortgage lien which is a voluntary lien by the owner of a home. When the owner gets the loan necessary for purchasing the house, a voluntary lien is marked on the house. The home becomes the collateral for the borrowed amount.

There is the Tax lien. This kind of lien can be filed by the government on a property or estate against any taxes that are owed by its owner. The actual process for filing a Tax lien is different for each state. However, the owner of the property must be notified and given a reasonable time to pay the tax amount before the lien can be filed.

The Mechanic’s lien is a form of claim on a property against unpaid services rendered by a person. For example, if a construction company carries out repair work on a house but the owner fails to pay for the services, the company can file a mechanic’s lien for the payment of services rendered.

No matter what kind of lien is marked on a property, it severely restricts you from transferring its title to another party until the loan is satisfied.

Questions About Property Liens in Austin, TX?

We are Tally Two Investment Group of Austin, TX and can answer any questions you might have about property liens or real estate in general. We forgot to mention, we can also buy your home for cash if you’re ready to sell now. We have even purchased homes that did not have a clean title! Give us a call at 512-763-0883. How nice would it be to sell your home with ease? To avoid a realtor; to receive a fair price. We can make that happen when you reach out to us. Get a fair assessment of your home with no obligation today.