What’s a lien on a house? Learn how it works and explore types

When you take out a mortgage you voluntarily agree to a lien, which is an agreement that gives creditors the legal right to claim your property if you don't pay certain debts. That might seem intimidating, but liens are standard parts of homeownership. From mortgage liens that help you buy your home to tax liens that ensure local governments get paid, understanding what liens are and their role in real estate transactions can help you protect your investment.

What’s a lien on a home?

A property lien is a legal claim against your house that gives creditors the right to collect money you owe them. Think of it as a security measure that protects lenders and other creditors by using your home as collateral. When you have liens against property, you typically can't sell or refinance until you pay off the debt or satisfy the claim.

Liens attach to the property itself, not just to you as the owner, so they stay with the house even if you sell it. The lien holder has the legal right to force a sale of your property if you don't meet your obligations, though this usually happens only after other collection attempts fail.

How do home liens work?

Liens get placed on your property through different legal processes, depending on the type of debt involved. When you take out a mortgage, you voluntarily agree to a lien that lets your lender claim your home if you stop making payments. Other liens might get placed without your direct consent, like when you don't pay taxes or lose a court judgment.

Once a lien is in place, it creates a public record that shows up during title searches and credit checks. The lien stays active until you pay off the underlying debt, at which point the creditor should file paperwork to release the claim.

Most liens follow a priority system where courts pay some claims before others when they sell your property. Courts typically pay primary mortgages first, as well as tax liens and other types of claims in the order creditors file them.

General vs. specific liens

General liens give creditors claims against all your assets, while specific liens only attach to particular pieces of property. A judgment lien from a court ruling might be general, meaning it could affect your house, car, and other assets. A mortgage lien is specific because it only applies to the home you bought with that loan.

You can predict specific liens more easily since they tie to particular transactions or properties. General liens can be broader and affect assets you didn't expect, making them more disruptive to your financial planning.

Voluntary vs. involuntary liens

You create voluntary liens when you agree to them as part of a transaction, like taking out a mortgage or home equity loan. These liens are part of the deal you make to borrow money; you know about them from the start.

Involuntary liens get placed on your property without your agreement, usually because you haven't paid debts or taxes. Common involuntary liens include tax, judgment, and mechanics' liens from unpaid contractor work.

Types of liens

Here are a few common types of property liens so you know what you might encounter as a homeowner or buyer.

Mortgage lien

Your mortgage creates the most common type of lien in mortgage transactions. When Better or another lender provides money to buy your home, they get a lien that secures the loan amount. This voluntary lien gets removed when you completely pay off your mortgage.

Tax lien

Government agencies place tax liens when you don't pay property taxes, income taxes, or other government debts. These liens often take priority over other claims, making them particularly serious. The government can auction your property if you don't pay your tax debt.

Judgment lien

Courts can place judgment liens on your property when you lose a lawsuit and owe money to the winning party. These liens ensure the winner can collect their court-awarded damages even if you don't pay voluntarily.

Mechanic's lien

Contractors, subcontractors, or suppliers can file mechanics' liens when you don't pay in full for work on your property. These liens protect workers and material suppliers by giving them claims against the property they improved.

Homeowners' association (HOA) lien

HOAs can place liens for unpaid dues, fines, or special assessments. While these might not amount to as much as a tax or mortgage lien, outstanding HOA liens can prevent you from selling or refinancing your home.

How to check for a lien on a property

Discovering liens against a property before they become problems protects your interests as a buyer or owner:

— Hire a title company: Professional title companies conduct thorough public records searches for a fee to find liens or other claims against a property. Better works with experienced title professionals who can uncover liens during the buying process and help resolve issues before closing.

— Request a credit report: Your credit report shows many lien types, like judgment and tax liens that affect your overall creditworthiness.

— Check county records: Visit or contact your local county recorder's office to search public records for liens filed against specific properties. Many counties now offer online databases that make this process easier.

— Work with a real estate attorney: Legal professionals can conduct comprehensive lien searches and help you understand the implications of any claims they discover.

...in as little as 3 minutes – no credit impact

How to remove a lien on a property

Getting liens removed requires addressing the underlying debt, but you have several options depending on your situation:

— Pay the debt in full: The most straightforward approach involves paying what you owe and getting a lien release document from the creditor. Make sure to get written proof that the lien has been satisfied and properly removed from public records.

— Negotiate or approve a settlement: Creditors sometimes accept less than the full amount owed for very old debts or if you can demonstrate financial hardship. Get any settlement agreement in writing before making payments.

— Dispute the lien: If you believe a lien was filed incorrectly or fraudulently, you can challenge it through the courts. You’ll need legal documentation to make a dispute, and you may need professional legal help.

— Wait for expiration: Some liens expire automatically after certain periods, though this varies by state and lien type. Don't rely on expiration without confirming the specific rules in your area.

Navigate liens with the right mortgage partner

Property liens are legal tools that protect creditors. Whether dealing with a mortgage lien as part of buying your home or facing unexpected liens from unpaid debts, understanding how these claims work helps you make informed decisions about your property.

Better simplifies the mortgage process by working with experienced title professionals who can identify and help resolve lien issues before they complicate your transaction. Our streamlined approach to home financing includes comprehensive title services that give you confidence in your property's legal status. 

Start your homeownership journey with Better and experience how the right support makes all the difference in protecting your investment.

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Frequently asked questions

How does a lien affect the owner's ability to sell or refinance a property?

Liens typically must be cleared before you can complete a sale or refinance. Most buyers and lenders won't proceed with transactions when active liens exist, since these claims could affect their interests in the property. You'll usually need to pay off liens at closing or make arrangements to satisfy them before completing the transaction.

Can you sell a house with a lien on it?

Yes, but the lien usually gets paid from the sale proceeds before you receive any money. Your title company will coordinate with lien holders to ensure proper payments and releases happen at closing. If your sale proceeds don't cover all liens, you might need to bring money to closing or negotiate with creditors for reduced settlements.

Does a lien affect your credit score?

Some liens directly impact your credit score, particularly tax and judgment liens that get reported to credit bureaus. Even liens that don't appear on credit reports can indirectly affect your creditworthiness by limiting your ability to borrow against your home's equity or complete refinancing transactions.

What happens if you ignore a lien?

Ignoring liens can lead to serious consequences, including forced sale of your property through foreclosure or sheriff's sale. Your state's laws and the type of lien involved determine the specific timeline and process, but creditors can use several legal methods to collect what you owe them.

...in as little as 3 minutes – no credit impact