Legal Question in Real Estate Law in California
Liens on homes
Can a lien be taken off the property, so the owner can refinance that property and take the money they received from refinancing, to pay off the company who brought on the lien? It seems the only way to refinance is to not have a lien on the property. How will I take the lien off the property, if I dont have the money to pay off the debt at this time. The only way to pay off the debt is to refinace my home, which I planned to do in a few months. Is there a way to take off this lien?
2 Answers from Attorneys
Re: Liens on homes
You should be able to pay-off the lien through the refinance escrow. Tell your lender what you want to do and they should be able to help you.
Re: Liens on homes
The great majority of financings and refinancings involve paying off one or more pre-existing liens. Therefore, your pre-existing lien shouldn't be a problem for your lender.
Liens become a problem when the underlying debt is disputed. If your contractor filed a $50,000 mechanic's lien, for example, and you thought you only owed $10,000, you wouldn't want to pay it off before settlement (or trial).
There are also some kinds of liens that might spook a lender because their mere existence would reflect badly on the loan applicant's financial responsibility, possibly for example liens for unpaid taxes or judgment liens resulting from fraud suits against the applicant. Hopefully none of this applies to you.
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