FAQs: Property Liens

Are you curious about property liens and how they can affect you?  Let Arrowhead Title help answers some common questions in regards to property liens.  Property liens are fairly standard in the real estate business, so as a homeowner, or potential homeowner at the Lake of the Ozarks, this is an important factor that you should consider when purchasing a home.   In today’s blog, your Lake of the Ozarks title company will explain what a property lien is and how having a lien on your property can affect you as a homeowner.

What is a Property Lien?

A property lien is a claim on a residential property for the homeowner’s unpaid bills.  In other terms, it is a publicly recorded notification that a creditor claims the homeowner owes the creditor money for unpaid debt.  Before you can sell your home, you must pay off this debt or lien on your property.

What are Some Types of Property Liens?

There are several different types of liens that can affect your right to ownership of your home or property.  A "mechanic's" or "construction" lien protects the provider of services whose charges to the owner for repairs, improvements or maintenance have gone unpaid (for example, if a home improvement project was completed on the home, but the parties who were hired to complete this project were never paid in full).  A lien on the property also exists when a mortgage loan is used to purchase the home. In exchange for use of the money needed to purchase the home, the lender has a legal claim on the property.  Property tax liens and other liens of such nature can be filed by the IRS against the property for past unpaid federal taxes, or owed back-taxes.  The IRS and the county tax assessor can also place liens on property for unpaid income taxes and unpaid property taxes.

How Does a Property Lien Affect You as a Homeowner?

- Affects Your Credit
Having a lien on your property can negatively affect your credit. Your credit score is affected by your past payment history, so if you have a lien on your property from an unpaid debt, this will negatively affect your credit score. It is also important to note that a lien (or debt owed on your property) can stay on your credit report for up to seven years!  Your credit report affects many financial decisions you will make both now and in the future.  An example of this is that your credit score affects being able to get a mortgage; therefore, having a lien on your property now could not only affect your current financial situation, but could also keep you from being able to purchase a home in the future.

-Affects the Ability to Sell or Refinance Your Home
In order to sell or refinance your home, you must have a clear title. Having a lien on your title makes the title unclear. To get rid of the lien, you will have to pay the creditor the debt that you owe. After that, the lien will be removed from the title and you'll be able to sell or refinance your home if you wish.

What Can You Do?

Ensure your title is free and clear of liens by investing in title insurance.  If you are in the market to purchase a home, it's important you make sure the title of the home you're looking to purchase is clear. By hiring a title insurance company at the Lake of the Ozarks, you can rest assured that you're protected from unexpected liens and other issues with the title. We will do a careful search and examination of public records to ensure a clean title before your purchase of the home. At Arrowhead Title, it is our goal to minimize your risk and maximize your investment.

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750 Bagnell Dam Blvd Suite B
Lake Ozark, MO 65049


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