There may be a lien on your house without you even realizing it. That’s right. Even if you have paid off your mortgage there may be claims against your property. In light of the fact there are so many opportunities to get tangled up in real estate problems of this sort, I thought it might make sense to go through this issue in detail. By the time you’ve finished reading this you’ll know how to find out if there is a lien on your house. I’ll also show you how to cure this problem.
What is a lien?
A lien is a claim against your property that backs up a debt that somebody says you have. If the debt isn’t paid, the debt holder has the right to enforce the lien in court. On the basis of the lien, they can sue you. If they win the suit they can seize your property. Ouch.
Who Can Put A Mortgage On Your Property?
Many different people can do this. If you get a mortgage against your property the bank that holds the mortgage puts a lien against your home to guarantee payment. But there are several other parties who can file a lien against your property. The Federal government can file a tax lien and so can local governments if you don’t pay your tax bills. Unfortunately, it doesn’t stop there.
If you don’t pay contractors and subcontractors (or if they say you didn’t pay them) they can also file liens. Other creditors can also file liens depending on the state you live in. Some states put liens on your home if you don’t pay child support or alimony. There are lots of opportunities to find yourself with a lien. No fun.
How Do You Find out If There is a Lien against Your Home
There are several ways to do this. First, you can go to the courthouse and look it up. A simpler option is to ask a title company to prepare a report for you. It will cost you a little money but it will save you a great deal of time.
If you have a mortgage on your home, you can save time and money by simply calling the bank that is carrying your loan. They will tell you if there are any other liens on your home besides their own.
Is there a bogus “lien” against you? They can hurt even more than a lien against your property. A personal “lien” is hit against your credit report. Make sure your credit report doesn’t have any errors. The good news is that you can check your credit report for free without signing up for any “free trials” or using your credit card.
What Is The Effect Of Having A Lien On Your Property?
A lien on your home can be serious business. When there is a lien against your property it may be tough to sell, refinance or even rent your home depending on the State in which you live. The courts sometimes force the sale of your home in order to satisfy the debt if the claimant sues and wins.
That’s why it’s so important to check to see if there are any such encumbrances against your home.
Sometimes people slap liens on your property when they shouldn’t. One way you can find yourself in this rat hole is if your contractor takes your money but doesn’t pay the subcontractors. This happens more often than you think. And if it happens to you the subcontractors can put a lien (called a “mechanics lien”) on your property.
How to make sure contractors don’t sneak a lien on your home.
When you pay your contractor, demand a “Lien Waiver” from everyone – contractor and subcontractor alike. This document is a declaration that they have received full payment and that they don’t have a claim on your home. That said, there a number of other steps should take to “lien proof your home”. There also a number of other things you must do if someone does put place a lien on your property. I’ll be writing about both these topics soon.
Property liens are serious business. Don’t ignore them. If you have a bonafide debt held against you, pay it. If the lien is phony, get rid of it. Just don’t ignore the issue. It could be a very costly oversight.
Have you ever had a lien placed on your property by a Government body or contractor? What did you do about it
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