What Is a Lien and How Does It Affect My Property?

A lien is a legal document that is recorded against a property in order to secure repayment of a debt. It gives the lender the right to take possession of the property if payment is not made in full. Understanding what liens are and how they can affect your property can help you make more informed decisions about your finances.

A lien can be placed on any type of real estate or personal property, such as cars, boats, and other assets. When someone takes out a loan or uses credit, they pledge their assets as collateral for the debt - this places a lien on their property until the debt is repaid in full. If that person fails to make timely payments, then the lender has the right to repossess those assets. Additionally, liens will show up on credit reports which could have an effect on future borrowing decisions and interest rates charged by lenders.