Can a Lien Be Placed on Property That is Owned Outright?
A property that is owned cannot have a lien placed on it unless the owner procures a second mortgage, home equity loan, reverse mortgage, or contracts for new construction or renovations. In each of these loans the bank or company places a lien on the property.
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Home Equity Loan
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A home equity loan is a lump sum payment to the property owner based on the equity the owner has accumulated. Most home equity loans have a borrowing minimum of $10,000 and a maximum of $500,000. These loans have a fixed interest rate and monthly payments, and are based not only on the owner's equity but also his income.
Second Mortgage
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A second mortgage is similar to a traditional mortgage, and actually is secured by the same assets as the first mortgage. Second mortgages are used to borrow large sums of money for various reasons such as home improvements, college tuition or other emergency uses. Second mortgages tend to have higher rates then traditional, or first, mortgages.
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Reverse Mortgage
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A reverse mortgage is a special type of home loan available to seniors over the age of 62. Reverse mortgages are loans against the compiled equity of a property. These loans may be paid to a borrower in monthly payments or in a single lump sum, and are not due and payable until the borrower either moves, is unable to stay at the property for 12 months, or dies.
Mechanic's Lien
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A mechanics lien, sometimes called a construction lien, is a type of lien placed against an owner's property. This type of lien is placed on a property to guarantee payment for construction, design or renovations to an existing property. These liens are placed on a property by the person of company responsible for the renovations.
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References
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