A lien is a legal claim against a property that secures the repayment of a debt. When you take out a mortgage, the lender records a mortgage lien on the home. This is usually the first lien, meaning it has first priority to be repaid if the home is sold or refinanced.
Homes can also have second liens. These are additional debts secured by the property, such as a home equity line of credit (HELOC), a second mortgage, or certain home‑improvement loans. In New Hampshire, down‑payment assistance from NH Housing is recorded as a second lien.
Other liens can be placed on a home if money is owed to a creditor. A contractor may file a mechanic’s lien if work is completed and not paid for. Towns and cities can place a tax lien if property taxes are unpaid, and the IRS can file a federal tax lien for unpaid federal taxes.
A lien does not give the creditor ownership of the home. Instead, it gives the creditor a legal right to be repaid from the property’s value if the debt isn’t satisfied. In most home sales and refinances, liens must be paid off or otherwise satisfied before clear title can be transferred.