What Is A Lien? Information For Homeowners

Lien FAQs

Now that you know the basics, let’s answer some lien questions that come up frequently.

What does it mean to have a lien against you?

When you have a lien against you, it means that someone has a right to your property under specified circumstances. Typically, these would involve defaulting on an agreement or loan. The government will place a lien on your property over unpaid taxes as well.

Liens don’t have to be a bad thing. Sometimes it just means you haven’t finished paying off a debt. Anyone who has a mortgage has a lien on their home. They’re also common if you have a solar panel loan.

How do I remove a lien from my property?

Most commonly, you get a lien removed by either fully paying off your debts, paying for work under an agreement, satisfying a judgment or paying back taxes. If you feel a lien has been wrongfully placed, there are certain circumstances in which you may have to go to court to have it removed.

Will a lien affect my credit score?

If you have a lien, there’s a chance it could impact your credit score because it can show up on your report as a negative item, particularly if you have something like an unpaid judgment. It’s common to have a lien on your home or your car if it’s an auto loan, but if you have things like judgments, mechanic’s liens or back taxes to take care of, it could present a bigger challenge in qualifying.

Can I refinance my home if there’s a federal tax lien on it?

In general, tax liens have to be paid off before you close on your home. The lone exception is that FHA allows for you to close with a tax lien under certain circumstances if you’re on a repayment plan and have made at least 3 months of documented payments. We recommend speaking with a Home Loan Expert about your situation.