The three kinds of lien, and what each needs
| What turned up | Kind | What usually has to happen |
|---|---|---|
| Existing HELOC or home equity loan | Voluntary | Find a lender that will go behind it, or pay it off with the new line |
| Solar loan UCC filing or PACE assessment | Voluntary | This program lends behind both; the balance counts toward equity |
| Seller-carry or private second mortgage | Voluntary | Lend behind it in third position, or retire it |
| Court judgment | Involuntary | Pay, settle or otherwise resolve before or at closing |
| Federal or state tax lien | Involuntary | Pay, arrange a release, or resolve with the taxing authority |
| Mechanics lien from a contractor | Involuntary | Pay the claim or get it released or bonded off |
| A lien you already paid | Stale | Get the recorded release or satisfaction from the old creditor |
When a different lender actually helps
If the decline letter says the lender "does not lend behind" another loan, or cites your combined loan-to-value with an existing line, that is a position problem. It is specific to that lender's guidelines. This program will lend in second or third position, behind existing lines, home equity loans, solar financing and PACE assessments, so the same file can get a different answer without anything about the property changing.
Many of these declines happen to self-employed borrowers twice over — once for the lien and once for income, because the tax return did not show enough. The income side here is 12 months of deposits, so neither reason carries over.
When it does not
Judgments, tax liens and mechanics liens are claims someone else has against the property. A home equity lender will not fund with one of those unresolved ahead of it, and a new lender cannot make one disappear. Depending on the lien and the amount, it is sometimes paid off at closing, and it is worth a conversation to see whether the line itself can be structured to do that. What is never worth doing is applying at five more lenders hoping one misses it; the title search will not.
Finding liens before a lender does
- Search the county recorder for your name and property address. Most counties have this online at no cost.
- Look at your property tax bill for any special assessment line — that is where PACE appears.
- Read your solar financing agreement for "UCC," "fixture filing" or "deed of trust."
- Check for paid-off loans still showing. A refinanced mortgage or a closed line whose release was never recorded is one of the most common surprises, and one of the easiest to fix.
Common questions
Can a HELOC pay off a judgment lien at closing?
Sometimes, depending on the lien, the amount and the file. It is a question to raise before applying rather than after the title report comes back.
I paid off a loan years ago but it still shows as a lien. What now?
Ask the old lender or its successor for a recorded release or satisfaction of mortgage. It is paperwork, not a credit problem, but it has to be done before closing.
Does a solar loan count as a lien?
It can. A loan secured by a UCC fixture filing or a recorded mortgage shows up on title; an unsecured loan or a lease does not. This program lends behind secured solar financing.
Will applying again hurt my credit?
Pre-qualification here uses a soft pull, which does not affect your score. A hard pull happens only if you proceed to a full application.