
I’m a big fan of the song “Lean on Me” by Bill Withers. In it, Withers asks you to lean on him for support. But there’s a different type of lean with a different spelling.
It’s generally considered to be a bad thing if you have a lien on your property. However, I’m going to let you in on a little secret: Lots of people have one on their home.
A Deeper Dive Into Mortgage Liens
Although liens generally get a bad rap, the reality is a little more nuanced than traditional thought. Let’s take a deeper dive into mortgage liens.
Find out what you can afford.
Use Rocket Mortgage® to see your maximum home price and get an online approval decision.
Property Liens To Avoid
Mortgages give support, but you usually don’t want any other type of lien on your property. Which liens are bad? If they aren’t satisfied by the time you sell your house, lots of creditors have the ability to place a lien that can cause trouble later. Here are some of the most common reasons for liens:
Judgment Liens
A creditor or an individual may win a judgment against you in court and have a right to place a lien on your property until you pay. One way this might occur is if you lost a dispute with a contractor over a payment for work.
Tax Liens
If you haven’t paid your taxes in a while, the government can also choose to put a lien on your property until you’re current on your taxes. There’s an added wrinkle with tax liens.
Homeowners Association Liens
If you live in a homeowners association and don’t pay the dues, odds are the association will start by sending you letters and assessing late payment fees. If that doesn’t work, it may have the power based on the bylaws to place a lien on your property. It may even be able to progress to foreclosure, although this would be a last resort. The association may not want to go this route, though, as it would have to pay the property taxes.
Finding Liens
You can’t take care of your liens if you don’t know about them, so how do you go about finding them? That’s a very good question.
Liens Affecting Your Mortgage
Not only can liens affect the sale of a property, they also have the ability to kill your opportunity to buy a house or refinance your existing home.
Foreclosure
If you have a lien that could eventually turn into a tax or homeowners association foreclosure, it’s important to take care of these items before they get to the foreclosure point.
Get approved to buy a home.
Rocket Mortgage® lets you get to house hunting sooner.