Are we able to renew our mortgage if there is a lien on it? If not, what happens?
Are we able to renew our mortgage if there is a lien on it? If not, what happens?
A mortgage is a lien?? Do you mean there is another lien on the property besides the mortgage
If there is a lien on the property junior to the mortgage, upon renewal the lien would become senior to the new mortgage. Thereore the lender may decide that there is not sufficient equity to protect their interest and deny the renewal.
To be clear, I have had a mortgage on my house for years. A lien was put on by a creditor about 1.5 years ago. Does that mean that the lien is now 'senior' to the house mortgage?
If so, and I cannot renew the first mortgage, what happens? Obviously the first mortgage needs to be paid off - but if I can't do it, what happens?
You are apparently not understanding what I wrote yesterday.
No, the lien, apparently a judgment lien, was recorded after the date of your mortgage, correct? If so, it would be junior to the mortgage. What I mean by "junior" is that the mortgage is not impaired by the lien. If the mortgagee (bank or other person or company to which you owe the mortgage debt) were to foreclose, the owner of the lien would become unsecured.
So the mortgage is senior. You continue to pay it. The creditor which owns the "junior" lien can, in theory, foreclose on this lien, but to do so, he/she/it would have to pay off the mortgage. That's not likely to happen. Alternately, the junior lienor could simply wait until you pay off the mortgage, and then foreclose.
If you want to "renew" your mortgage, you will have to re-finance the full $130,000 debt. The lien would be paid off from the loan proceeds.
If you renew (the usual term is refinance) the mortgage, it becomes a new loan and would then become junior to the judgment lien. Since no lender is likely to want to take a secondary lien in this situation its unlikely you will get a refinance, unless you borrow enough money to pay off the judgment.
While the secondary lienholder could foreclose the general process is for them to wait until you sell and then require that you satisfy the lien before you can complete the sale.
Correct they probably won't refinance.
What happens is you don't get a refinance and you have to pay the existing mortgage.
Still not clear. If I can't pay the lien ($90,000), do I continue to pay the 1st and 2nd mortgages ($40,000 and $130,000 respectively) - or does my property go into foreclosure? I can pay the first and second mortgage and am not in default on these. (I would even be willing to pay something on the lien but I was told that I had to pay the $90,000 in one shot.)
You continue to pay. The lien holder is unlikely to be able to force a foreclosure.
In Post #5, you didn't mention the second mortgage, which, coincidentally happens to be the total of the first mortgage and "the lien". Are you sure about your figures?
But no; it is probably incorrect that you would have to pay the lien in one shot. Not that it makes any difference; the holder of the first is not llikely to refinance until the second and the lien are paid off.
Thanks for your respectful manner. Actually, my second figure was not correct. My first mortgage is $40,000, my 2nd is $102,000 and the lien put on 1.5 years ago is $90,000.
So if I can't get a first mortgage and can't pay the lien, what happens?
Good news,
I was able to refinance my first mortgage today (for five years) without any difficulty. I now have peace of mind.
Thanks to those who responded to my question.
Peace of mind! I was able to renew my first mortgage today for five years. This occurred without any problem.
Thanks to those who responded to my query.
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