What is the difference between a lien and a mortgage?

A lien and a mortgage are both legal terms used to describe financial arrangements related to real estate. While they are similar, there are important distinctions between the two. A lien is a claim or legal right against a property that arises when a party fails to repay a loan or owes a debt. Liens can be placed on homes by creditors who are unpaid, such as unpaid taxes, unpaid bills, or unpaid loans from banks or other creditors who lent money to the homeowner. Liens can remain on a property for an extended period of time, often until the debt is satisfied. A mortgage is a loan taken out to purchase a home. The lender, or mortgage company, holds the title to the property and the buyer (borrower) agrees to pay back the loan according to the terms and conditions of the loan agreement. When the loan is paid off, the mortgage company will transfer the title of the property back to the borrower. In Florida, the statute of limitations on mortgages is five years from the date of the executed mortgage. After five years, the mortgage must either be paid off or renewed to keep the lien in place. If the mortgage is not paid off or renewed, the lien is removed. In summary, the difference between a lien and a mortgage is that liens are placed on homes by creditors when a homeowner owes a debt, while mortgages are loans taken out to purchase a home, with the lender holding the title to the property.

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What is the difference between a lien and a mortgage?

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