Definition
A legal claim or hold on a property as security for a debt or obligation. A mortgage creates a voluntary lien on the property. Other types of liens include tax liens (from unpaid property taxes), mechanic's liens (from unpaid contractors), and judgment liens (from court judgments). Liens must be cleared before a property can be sold with a clean title. Title insurance protects against undisclosed liens.
Related Mortgage Terms
- Deed of Trust
A legal document used in many states instead of a mortgage that involves three p...
- Foreclosure
The legal process by which a lender seizes and sells a property when the borrowe...
- Title Insurance
Insurance that protects against financial loss from defects in the title to a pr...
- Amortization
The process of paying off a mortgage through regular monthly payments of princip...
- Annual Percentage Rate (APR)
The total annual cost of a mortgage expressed as a percentage, including the int...
Understanding mortgage terminology helps you compare loan offers and make informed decisions. Use our mortgage calculator to see how these terms affect your monthly payment.