Process

Lien

A lien is a legal claim against your property for a debt, which has to be paid before the home can be sold with clear title. Your mortgage itself is a lien: it lets the lender be repaid from the sale. Other liens, like unpaid taxes or contractor bills, can also attach to a home and must be cleared.

A lien is the law’s way of attaching a debt to a specific piece of property. When you get a mortgage, you agree to a lien that lets the lender recover what they’re owed if the loan isn’t paid. That’s normal and expected.

The liens you want to catch are the surprises: an old unpaid tax bill, a judgment, or a contractor who was never paid on past work. These can cling to a home and block a clean sale. The title search hunts for them before closing, and title insurance protects you if one slips through. Clearing liens is part of delivering you clear ownership.

Related terms

Title Insurance

Title insurance protects against problems with the home's ownership history, like an unknown lien, a past clerical error, or a missed heir. There are two policies: a lender's policy that protects the bank, which is usually required, and an owner's policy that protects you, which is optional but often worth it. You pay once, at closing.

Home Equity

Home equity is the part of your home you actually own: its current value minus what you still owe on the mortgage. If your home is worth $400,000 and you owe $300,000, you have $100,000 in equity. It grows as you pay down the loan and as the home's value rises, and you can sometimes borrow against it.

Closing Costs

Closing costs are the fees you pay to finalize your home purchase, on top of your down payment. They include lender fees, title and escrow charges, an appraisal, and prepaid items like taxes and insurance. Closing costs commonly run roughly 2% to 5% of the purchase price, though it varies by location and loan.

Last updated: June 13, 2026

This definition is educational and isn't an offer to lend or financial advice. Rates, programs, and guidelines may change without notice. All loans are subject to credit and property approval.

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