What is a lien?

Posted on | July 14, 2017

No matter if you’ve decided to purchase a starter or dream home, minimizing your risk is critical. An extremely helpful way of doing that is making sure the title is free and clear of encumbrances that can haunt you later down the road. AmeriTitle provides owner’s title insurance that hedges against those possible encumbrances.

What is an encumbrance you ask? It’s a burden or claim on a property for a debt of some sort that needs to be satisfied.

The most common encumbrance in a real estate transaction is a lien, which is defined as a claim of one person upon the property of another to secure the satisfaction of a debt or obligation.

There are two types of real estate liens: voluntary and involuntary.

Some types of voluntary liens

  • Mortgage
  • Trust deed

Some types of involuntary liens

  • Tax lien
  • Judgement
  • Mechanic lien
  • Home Owners Association (HOA) lien

Any one of these types of liens has the possibility to

  • Delay the selling/closing process
  • Diminish a property’s resale value
  • Limit the ability to refinance or apply for other loans
  • Affect overall creditworthiness
  • Affect your investments and family’s future

A surprise situation could also happen if an alleged heir to the property files a claim. This could be a lengthy legal battle complete with mental and financial stress.

When you close with AmeriTitle, our experienced title professionals examine public records, helping with the transition of the home from the seller to you during the closing process. If a problem is discovered, AmeriTitle works to resolve it before you purchase the home.

Should a surprise issue arise that threatens your ownership rights after you’ve purchased your home, an owner’s title insurance policy will typically defend you and your heirs legally and financially.

For more information, connect with your local AmeriTitle representative.

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