Definition
An encumbrance is a claim or charge on a property that affects its title and limits how the owner can use it. Examples include liens, easements, or zoning laws.
Understanding Encumbrances in Mortgages
During the mortgage process, encumbrances can appear in a title search. They are claims or interests on a property. In simple terms, encumbrances are like sticky notes on the title that need attention. Example: If a property has a $5,000 lien for unpaid work, it must be resolved before selling. It's not always a deal-breaker, but something to address. A common misconception is that an encumbrance means you can't sell your home. It doesn't stop you; it just requires resolution or agreement before proceeding.
