In addition to paying a monthly payment to satisfy the loan, lenders may also include other stipulations that borrowers must fulfil to stay in possession of the property. ![]() When you borrow money from a lender to purchase a home, the property is the collateral in the event you do not repay the loan. Many people may not realize that a mortgage or a home loan is a type of lien. The type of lien used will depend on the asset that is being used to satisfy an obligation. There are various types of liens that are used to secure different types of assets. Liens can be filed by a creditor, or they can be ordered through legal action. The party who files the lien is called the lienholder. Liens can be filed by an individual person or by an organization like a bank. ![]() , a lender has the security of knowing that if the borrower doesn’t follow through on satisfying a debt, the lender will have a legal claim to an asset. A lien is most commonly used as collateral for payment of a debt. A lien is a legal claim against an asset, often a property or a vehicle.
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