You might have heard the term before, but exactly what is a lien on the house?
A lien is a legal document that states that a creditor (the lienholder) might take having a piece of property if the owner doesn't make debt payments promptly. A home lien is filed having a county records office and is publicly accessible. Simply put, a lien is really a public warning that you simply owe payments on the bit of property and that your creditor may seize the home if you fail to pay.
A creditor may file a lien if you miss multiple payments or otherwise fail to pay a debt promptly. A lien is the first step toward repossessing a piece of property, but does not guarantee you'll lose possession or foreclose on your home. Actually, some kinds of liens are harmless and never indicative of a delinquent payment history.
It's easy to resolve a lien by fulfilling debts promptly, working out a payment plan, or else creating another type of settlement plan having a creditor. It is also possible for homeowners to sell a home with a lien attached and transfer down to repayment to a different, though this may be difficult.
How to Find Out If There is a Lien In your House
In most cases, you will be notified by the lienholder if they choose to file a lien in your home. If you're not confident that there's been one put on your house, searching on your local county reporter's website or give them a call to inquire about to look for you. You may also ask a third party title company to conduct the quest for you for a fee.
Homeowners in Hillsborough County, FL, can search here to find public lien records. Click the link to read more about our website about discovering liens on your home.
How Liens Affect You
On its very own, a lien is simply a public document stating a claim against a house. A lien itself is not really a criminal or civil charge. A creditor has the ability to force the sale of your home (foreclosures) to pay the lien, however this is rare and difficult for creditors to do, so it's unlikely to occur to you.
However, you do have to repay a lien or risk future consequences. If you are can not make payments, talk with your creditor about payment plans or contact us at Associates Home Loan for other ideas concerning how to pay.
Furthermore, a lien on a bit of property that you simply own can negatively impact your credit rating. Most credit rating agencies collect public documents from counties and states and will use these documents when calculating your credit score.
A paid lien may stay on your credit score for up to Many years; an unpaid you can stay for up to 10 years. Lenders may view you as riskier if they see one on your credit history.
Voluntary vs. Involuntary Liens
There are a couple of major categories of liens: voluntary and involuntary.
A voluntary lien is one that you agree to when choosing a house and taking out a mortgage from a lender. Everyone having a mortgage has this type associated with their property and it is not harmful to you by any means.
An involuntary lien could be filed without your consent-or even without your knowledge, in some instances. These can be filed by anyone in the IRS for federal tax debt, the county for missed property taxes, or perhaps contractors who perform work on your house. Involuntary liens require action, whether that's making back payments or agreeing on a payment plan. Without acting, a creditor may seize having a house.
Frequently Asked Questions
Are liens bad?
Not necessarily. A lot of lenders or any other banking institutions often place voluntary liens on homeowners once a mortgage begins, and this is an expected and normal process. This guarantees the financial institution may take possession if the borrower defaults, but doesn't indicate that you have missed payments.
However, an involuntary lien may have negative impacts on your credit rating and could make selling a house difficult. In this instance, it's important to resolve the lien as quickly as possible to mitigate lasting consequences.
What will i do should there be a lien on my house?
First, determine if it's voluntary or involuntary. If it's voluntary, plus there is no need to take action apart from to continue your regular monthly mortgage payments.
If it's involuntary, you will want to discover who placed it and why. For example, some contractors place liens on homes as a way to ensure they're fairly paid once jobs are complete. They might remove it once the job is done, but it's best to still inquire about it.
If you have a lien because of missed payments, then talk to your creditor. They might be capable of working out a payment or settlement plan with you based on your needs and causes of failing to pay.
How long will it take to resolve a lien?
Voluntary liens automatically resolve once you finish paying down your house.
An involuntary lien can last so long as there is delinquent debt on the property. When the debt is resolved, you might file a lien release together with your local county clerk's office when the creditor doesn't achieve this automatically. From there, it's a matter of waiting for the paperwork to be processed. It can take as much as 30 days for any lien to become removed from the public record.
If you're facing a dishonest or scam lien, then you should consult a lawyer to find out your options for resolution.
What if I convey more questions?
At Associates Home Loan, we are able to help if you are struggling to resolve a lien or would like to learn more about the way they work. Click this link to contact us along with a person in our team can help answer all of your questions about liens, your mortgage, and much more.