If you have a high interest rate on your home and would like to refinance the loan to get a lower rate, you may run into a problem if there is a lien on the house. Having a lien on your house will not necessarily stop you from refinancing it, but you will almost always have to pay the lien off before you can complete the home refinancing. Here are three things to know about liens.
What Is A Lien?
When you owe a creditor money and do not pay it, the creditor may be able to file a document with the court that places a lien on your house. When there is a lien on a house, it means that the owner of the house cannot sell the house. The lien actually provides leverage or ownership to the creditor that is owed the money. The only way to remove a lien from your house is typically to repay the amount owed.
If you do not believe the lien is valid and should be there, you may want to call the creditor to discuss the issue. If you have proof that you already paid it, you can apply for a lien removal for the property by visiting your local courthouse. If you cannot prove you paid it or that it is not valid, you will have to pay it to get it removed.
What Are Your Options For Paying The Lien?
There are a number of ways to pay a lien off so that you can refinance your home loan, and one option is to use a credit card. Once you pay it with a credit card, it will be removed and you will then be able to refinance.
If this is not a good option, you could talk to your lender about working the amount into your loan. When you refinance, you will get a brand new loan, and the money from it will pay off the existing loan. If you get enough extra money from the new loan, you can use it to pay off the lien in full, and this is usually the way refinancing is handled when there is a lien on a property.
There are a lot of perks with refinancing a home loan, but this process can take longer if you have a lien on your house. To learn more about refinancing your home loan, contact a business such as Assurance Financial.