Versión en Español Articles about Tax Liens
A tax lien is a lien that is placed against the property because the homeowner has not paid the taxes. If someone decides to purchase a home, they may want to check if there are any taxes owed on the property.
There are a few important things to understand about tax liens. When it comes to real estate, if a tax lien is not paid for the county where the property is located, the certificate can be sold. What happens next is the highest bidder wins. If a person wins the bid and obtains the certificate, this does not mean they own the property. If the property owner does not pay the certificate owner in a specified time frame, the certificate owner can actually foreclose on the property just like a bank or lender would.
Normally, tax liens are not placed on properties until the taxes are delinquent. However, there are some states that will place a tax lien on the property and then remove it once the property owner has paid the taxes. In this particular situation, the taxes don’t have to be due yet for them to place tax liens.
Some homeowners have their taxes worked into their mortgage in an escrow account. This is a great way to keep tax liens from appearing. When the mortgage is paid, a certain amount of money goes towards the property taxes. The mortgage company then pays the taxes from the escrow account. It is very rare that tax liens are placed on property in which the mortgage company is responsible for the payment.
If there is a mortgage, but there is no escrow account, there is still a chance that tax liens will not take place. The reason for this is once a property goes delinquent in taxes, the mortgage company is notified. Normally, they will pay the taxes that are owed and then add that in with the mortgage payment. This ensures them that they will receive their money back. Also, tax liens go against a person’s credit. Once the proper notices have been completed and filed with the court, the credit bureau will place the lean on the credit file.
Tax liens can lead to a variety of issues for the property holder. That is why it is always best to pay the property taxes when they are due. This saves the property owner a lot of trouble.
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