Types Of Property Liens

We spend a lot of time discussing how title insurance is your first defense against complications with your future home, such as unknown liens against the property. This week, we wanted to take a closer look at some examples of these types of liens and the impact they can have on your property.

The Basics of Property Liens

Essentially, a lien is a claim against your property stating that you owe a certain creditor money for an unpaid debt. By placing the lien, the creditor secures the property as collateral against the debt. If the debt ultimately remains unpaid, the creditor may seize the property as a way of repaying the loan.

Different Types of Property Liens

Some liens are voluntary; the property owners knowingly and willingly place the lien on their home in order to take out a loan. This is commonly used when homeowners take out second mortgages in order to fund home improvements, debt consolidation, or a child's college education. 

Most types of property liens are involuntary, however; the owners have liens placed against their property when they fail to make necessary payments on money they owe. These involuntary loans come in several different forms.

Child Support Liens
If you owe your ex-spouse a significant amount of money for child support or alimony, your ex may have a lien placed against your property. This lien will remain in effect until you sell/refinance or until you pay the money you owe (whichever comes first).

Tax Liens
Many creditors place liens against the property and then wait for the sale of the house to get their payments, but the government is not always as forgiving. If you owe money for back taxes or property taxes, the government can require you to sell your home prematurely so you can pay the money you owe.

Mechanic's Liens
A mechanic's lien can be placed on your property by an independent contractor who works on your home and is not paid for his services. Generally, the contractor must record the lien within six months of the services rendered in order for it to be validated.

What Does This Mean For You?

A lien is the method creditors use to ensure they will get back the money that is owed to them. When you buy a home, your title company will conduct a thorough title search in an attempt to identify any outstanding liens that may still be placed against your property. Mistakes do happen, however, so title insurance protects you against unknown liens (or other hazards) that may be attached to your property.

Unlike other forms of insurance, title insurance protects against unknown situations that have already happened. When a previously unidentified lien or other claim against your property surfaces, your title insurance policy will serve as your first line of defense.

Contact Arrowhead Title, Inc. For Your Title Insurance Needs

If you're preparing to buy property at the Lake of the Ozarks, we hope you'll keep Arrowhead Title in mind for all your Lake of the Ozarks title insurance needs. We have been proudly serving the Lake area since 1984, and we look forward to working with you!

 The Lake of the Ozarks' Most Trusted Title Company
Location: Lake Ozark, MO 65049, USA

Comments

Post a Comment

Popular posts from this blog

Title Commitment vs Title Report

Image
Do you know the difference between a title commitment and a title report? While these documents may sound similar at first, they actually serve very different purposes and should not be confused. As your trusted title company at the Lake of the Ozarks , Arrowhead Title is here to help clear up any misunderstandings you may have about title commitments and title reports. Title Commitments Title commitments are issued when someone is in the process of buying a home or piece of property. After the title search has been conducted (that is, after your title company has thoroughly researched the public documents for any pertinent information regarding the property), the next step is to issue the title commitment.  The title commitment is exactly what it sounds like: a commitment  to provide title insurance to the lender and the buyer under the terms described. The title commitment outlines the conditions and exceptions that will impact the title insurance policy. Condi...
Read more

9 Fun Facts About Title Insurance

Image
Title insurance is a crucial part of buying real estate, whether a home, business, or commercial or residential plot of land. Without title insurance, your right to use and occupy your new property may be hindered by rights and claims asserted by others - potentially even years after the closing date. Despite its incredible importance, title insurance is largely misunderstood (if it's understood at all) in the general community. Arrowhead Title, Inc. is here to educate you on our unique industry by filling you in on these fun facts about title insurance. Fun Facts About Title Insurance 1.   Benjamin Franklin was the first person to come up with the concept of title insurance. 2.   Title insurance's primary focus is proactive, not reactive - it aims to prevent issues from ever arising in the first place. 3.   Title insurance is available in several other countries (not just the States). For example, it is used in Northern Ireland, Canada, Mexico, New Zealand, ...
Read more

9 Documents to Expect at Closing, Part 2

Image
Closing day is a date you've been looking forward to for a long time. All you have to do is get through a huge stack of legal documents without getting carpal tunnel! As the best title company at the Lake of the Ozarks , Arrowhead Title knows exactly what documents are coming your way. Last week we talked about four of the major documents you can expect on your closing date. Read on to learn about five more documents you will want to be ready to review and sign. Call Arrowhead Title for a team you can trust - we would love to help you prepare for and navigate the closing process! 5) Title Documents When you purchase your home, you are actually purchasing the right to the property. You won't technically own your home until it is paid off, but the title documents give you the legal right to the property. At this point in the closing process, the title has been thoroughly researched by the title company. During this search, any issues associated with the title should have...
Read more