What is the difference between a real estate lien and a mortgage?

A real estate lien and a mortgage are two different financial tools involving real estate. In Louisiana, a lien is a legal claim against a property that is used to secure a debt or obligation. This form of security is typically used when someone has borrowed money and not paid it back, and the lien acts as collateral until the debt is paid off. A mortgage is a loan taken out to purchase a property, and is secured by the collateral of the property itself. If a borrower fails to make payments on their mortgage, the lender can foreclose on the property to satisfy the debt. The main difference between a lien and a mortgage is the reason for which the parties involved agreed to the loan. A lender will usually require a lien to be placed if they are not confident that a borrower can pay back the money they have borrowed. In comparison, a mortgage is taken out when the borrower has a desire or need to purchase the property, and the lender provides the funds so the purchase can take place. In summary, a real estate lien is a legal claim against a property used to secure collateral in the event the debt is not paid back, while a mortgage is a form of loan used to purchase a property with the property itself acting as the collateral.

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What is the difference between a real estate lien and a mortgage?

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