What is the difference between a lien and a mortgage?

In Arkansas, a lien and a mortgage are both legal means of securing a loan but they differ in a few ways. A lien is an interest in property that is granted to a creditor as security for a debt. This means that if you do not pay what you owe, the creditor can take control of your property. It is a temporary form of security and does not involve ownership of the property. On the other hand, a mortgage is a form of loan that requires a borrower to pledge their property as collateral. This means that the lender has the right to take ownership of the property if the borrower fails to make payments. With a mortgage, the borrower maintains ownership of the property until the loan is paid off. In essence, a lien is a way of taking a stake in a borrower’s property while a mortgage is a way of taking possession. Liens and mortgages are both important parts of real estate law in Arkansas and are both used as ways of ensuring that loans are paid back.

Related FAQs

What is a landlord’s lien?
What are the laws governing real estate contracts?
What is a deed of reconveyance?
What are the duties of a closing agent?
What type of deed is best for my transaction?
What is a real estate syndicate?
What is the difference between a condo and a cooperative?
What is a homeowners' association?
What is reasonable wear and tear?
What are the laws regarding zoning and planning?

What is the difference between a lien and a mortgage?

Related FAQs

Related Blog Posts