Lien And/or Lien Interest......
Hi,
I'm very new to real estate. I just started a real estate class at my college in hopes to get my license. So far we've gone over the very basics; how to register for a licence and post-licence education and we started getting into the different types of relationships a licensee can enter into with a buy or seller. But, i'm really anxious to learn the good stuff so i've been skipping around in the book on my own.
Right now i'm looking through chapter 12, Real Estate Finance and I came across a term that is confusing me. Lien Interest; is it the same thing as a lien? To give you a better understanding of where I'm coming from, i'll type out the sentance.
Two instruments are involved in a mortgage loan: (1) the Promissory Note, which is the actual promise to repay, and (2) the Mortgage, which creates the *Lien Interest*.
I understand what a lien is. But by lien interest, are they talking about interest in the fashion of being interested in something or in the fashion of a percentage of payment?
What, if any, is the difference between a Lien and Lien Interest?
I bet this is the most newbie-type question one can ask on a forum, I can't wait to look back at this question in a year from now and just laugh. Thanks in advance.
[ Edited by Derek0783 on Date 06/23/2004 ]
I'd say no real difference, but a lot of us look at a lien we may hold on RE, securing a debt, etc., as an equitable interest in that RE.
Equitable means an ownership interest that's less than fee simple, deed or title interest. Whereas Legal Interest would mean you're on the deed.
.
Thank you very much for clearing that up for me.
Derek
For a specific piece of property there can be multiple owners for the different 'interests' in the property. When you see 'interest' think rights that can be clearly defined.
The city or the utility company have specific rights if they hold an easement. An easement is a right or interest to come onto the land, to route services through the land, etc.
A renter or lease holder has the right to use the property and to otherwise enjoy the benefits that comes from access to the land and and specific structures.
The lender has a right to acquire the property under specific conditions and in a specific way (when the debt secured by the property is defaulted on).
Mineral rights to that which is below the property but which could be extracted from a different property (oil & gas wells but the fuel is below your property).
Conclusion...
There are many rights or interests. Many of which can be separated or otherwise sold, traded, pledged to secure a debt, optioned, etc.
John
[addsig]
Wow,
The Real Estate industry seems like its going to be a life-long journy of education. Now I can see why there is so much post-licence education required in order to maintain my real estate licence. If I want to be successful, I'd better learn to love it or get out while I can. Luckily, I think i'm gonna like real estate.
Thanks for your comment.