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If you pay a mortgage, you have a lien on your home. When a bank finances a loan, the lien gives them a legal right to your property in the event your default on your mortgage payments.
However, a lien isn’t a bad thing in general. It’s simply a part of the home-buying process for many homeowners.
Still, not all home liens are quite the same. In fact, there are some that damage your credit score, which can impact your financial future. So, how do you know whether your lien is bad?
Here are some crucial facts to consider about liens.
This isn’t a simple yes or no because both are true. Let’s look at the no first.
Liens are automatic and don’t always have to do with your history of repayment. If you have a mortgage, you have a lien on your home. As such, it doesn’t harm you so long as you maintain your mortgage payments.
When you pay off the home, it removes the lien, freeing you of the burden. Now, let’s take a look at that “no.”
Generally speaking, any other type of lien is bad for a homeowner. This indicates that some type of debt is unpaid. Often, this results in legal action.
While this doesn’t mean the title for the property transfers, there is potential for that. Ultimately, that’s up to the lender.
Unfortunately, this often leads to the worst-case scenario. The lender seizes and sells the property. However, many lenders prefer to settle the debt with the homeowner.
One way to do this is to sell the property before the lender forecloses on it. When you need to sell your house fast, call on Third Coast Home Buyers for a cash offer on your home.
There are a few ways to remove a lien on your house. First, you have the option to settle the issue with your lender. Generally, how this works depends on a few factors.
In some cases, the lender agrees to an adjustment to the payment plan so that you can continue to make payments. It’s essential to understand these changes, though, and how they impact your loan.
Second, you have the option to sell your house quickly and pay off the mortgage with the money you receive. Oftentimes, it’s difficult to sell when there’s a lien on your home.
However, at Third Coast Home Buyers, we often buy houses with liens.
With a clear, straightforward process, we make a cash offer on your home to help free you of your burden.
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