Having a property lien placed on your home is a problem, and the best way to deal with this type of situation is learning how to avoid liens in the first place. To help keep you educated, we’ve collected the top 4 ways to avoid liens.
Stay On Good Terms with the IRS
If you fail to pay your taxes, you’re putting yourself at great risk for a property lien. Unpaid taxes are common reasons for the Internal Revenue Service to place a lien on your property to satisfy any mount that is owed, which could also include penalties, interest, and other fees.
Careful Loan Practices
In the lending world, it’s common for people to put up their home as collateral in order to qualify for a loan or a lower interest rate. While this can potentially save you money depending on the loan situation, always proceed with caution if you decide to take this route. Not only do you have to be 100% confident that you’ll be able to pay off the full amount on time, you need to make sure you have an emergency backup plan in case you hit an unexpected financial roadblock and risk defaulting on the loan.
Pay Your Property Taxes
A common problem for homeowners is many don’t pay their real estate taxes, whether it’s a conscious choice or they simply forgot. For example, the bank that holds a mortgage may already be paying the taxes for the homeowner and once the home is paid off, the responsibility to pay the property taxes shifts to the homeowner, who may be completely unaware that it’s now their responsibility. Get a good understanding of your property taxes and make sure they are always paid in full and on time.
Always Pay Your Bills
The #1 cause for a property lien is unpaid bills. This could be credit card debt, a loan that went into default, past due bills, and even unpaid parking tickets. If there is enough debt stacked against you, the creditor can take you to court and get a judge to place a lien on your home until the debt is paid. Avoid future stress and pay every bill as soon as it’s due.
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