When it comes to real estate transactions, understanding the complexities of mortgage liens and mortgage lien releases is fundamental. A mortgage lien is a legal claim against a property, serving as a notice that the bank (lender) holds a secured interest in the property until the loan is repaid or assumed. We often get asked about mortgage lien releases when selling a home and paying the loan off.
What Happens When Selling a House?
The process remains consistent during a property sale. The title company commits to the bank that the prior loan will be paid and released, handling the necessary steps to make it official. Once the title company pays the amount in full, your bank will file a mortgage lien release in the land records. Alternatively, you might receive the mortgage lien release from lender and be responsible for filing it with the appropriate authorities.
Should I Release an Equity Line with a Zero Balance?
Even with a zero balance, your equity line may still have a lien on the property. To complete the process, request the closure of the account and ensure a mortgage lien release is sent to you for the proper resolution. Especially when selling a property, that release must be processed. Even though it is an equity lien or a line of credit, it is still considered a mortgage and therefore needs a mortgage lien release as well.
What’s the Lien Release Process in a Refinance?
In a refinance scenario, the title company takes charge of paying off the existing loan and ensures the mortgage lien release process is initiated. Just as in selling a home, the mortgage lien release will be filed in the land records or may be sent to you as the owner to file.
How is a Lien Released?
When a bank loan is fully repaid, a crucial step follows – the Release of Lien or Satisfaction of Mortgage. This document is issued by the bank and recorded in the Land Records office, officially declaring that the lien has been paid in full and is released from the property.
Although the title company will order the payoffs, make the payments and follow up with all mortgage lien releases, the owner of the loan should be educated in the process. Understanding these aspects of mortgage lien releases empowers homeowners to navigate property transactions with confidence and ensure a smooth transition of ownership.
Title Junction is a full service real estate title company serving the area of Fort Myers, Cape Coral and the entire state of Florida since 2005. The company handles a number of real estate title services for both commercial and residential properties.
Have questions? Give us a call at 239.415.6574.
In case you missed it, check out our last Title Junction post: Why We Aren’t Headed for a Housing Crash