Credit gives the word to pay either by repaying it or returning those resources later. In other words, this credit is the method of making the reciprocity formal, legally enforceable, and of course, extensible to a vast group of people who are not related.
However, the resources provided may be financial or have goods or services, like consumer credit. The credit covers any form of deferred payment. Credit generally gets extended by the creditor, the debtor or lender, and sometimes the borrower.
The term “Free and Clear” in real estate is used in reference to the state of a mortgage of a property. It is a title used for properties that have no liens like a monetary claim, usually arising from a lawsuit or additional issues hindering further ownership of a buyer. With a free and clear property, there would be no doubts about the owner of the property or who can assert legal ownership over it. To put it in simpler words, the title Free and Clear means a property is completely paid off and no creditor has a claim on it.
Most property sales necessitate the complete payoff of a former mortgage before the new buyer takes a new loan. Having a property that is free and clear can give buyers a sense of security. For this reason, it crucial to ensure that any house you purchase has a free and clear title.
● Buyers cannot secure a mortgage or homeowner insurance without proper ownership.
● Without proper ownership, buyers risk losing the new house or, being swarmed with lawsuits and legal proceedings - even if you manage to complete the deal!
● Without a free and clear title, the property is vulnerable to being seized under eminent domain by the government.
If a property holds the free and clear title, the homeowner becomes eligible to offer seller finance to prospective buyers. Under such an agreement, the buyer pays a mutually agreed upon down payment, followed by subsequent regular payments. Buyers can also opt to pay cash instead of getting a loan to buy the home. This would provide a free and clear title to the property as well as free and clear ownership of the property.
Here’s how to check a Free and Clear Title of property:
● A homebuyer or seller can visit the local property records office.
● Conduct an online search to find a property’s title history.
● Check other records like building permits and zoning rules limiting property rights.
● Often mortgage lenders partner with a closing agent, like an attorney, escrow agency, or title company, for the title search.
