You have a home in mind for a purchase. You have been looking for months, and you're ready to buy. That's when you realize that the title might not be clear. Someone was telling you about a problem that had come up with his purchase, and now you're concerned.
It is very likely that there is a mortgage lien on the house you want to buy, but that isn't necessarily a sign that the purchase is a bad idea.
Why would a lender use a mortgage lien?
A mortgage lien is best for lenders because it gives them the most options when trying to obtain payments for your loan. For instance, if you miss a payment, the lender can charge you late fees. Over time, if you miss too many, the lender can send your home to foreclosure.
What happens if a home I want to buy has a lien on it?
In most cases, homes aren't paid off before a sale is completed. That means that the lien won't be paid off until after you've paid to buy the property. At that point, the lien should be paid in full, and the title should be released as a clean title. The mortgage has to be paid in full for this to happen.
When you take on the purchase of a property, you have a mortgage lien that then replaces the past owner's lien. The only way to avoid one is to buy the property outright, so there's no debt owed.
Your attorney can give you more information about a mortgage lien if you have concerns about the property you wish to purchase. Our site has more about this important topic.