What is ‘Free and Clear’ in Real Estate?
Real estate agents and investors frequently use the term “free and clear” to talk about a home or property, but what does this terminology actually mean? Free and clear means there are no encumbrances or any legal matters that burden or restrict the transfer of property. When a property is free and clear, it is completely free of any liens or mortgages.
For homeowners, paying off a mortgage means that you are free and clear. Those who have fixed rate mortgages can make payments on these mortgages for the duration of the agreement until the contract ends. Once the fixed rate mortgage ends and you’ve paid off the loan, your home is now free and clear.
Homes that are free and clear are appealing to buyers if these buyers do not want to obtain a loan with their property purchase. For many home buyers, they already have a loan out to purchase a home in the first place. Many do not want to have an additional loan agreement to worry about on top of the one they already have. Free and clear homes are more attractive to potential buyers.
Free and clear homes are also available to home buyers who want to pay cash for the property. When buying a home that is not free and clear, these individuals cannot pay off the home until paying off the mortgage. When a mortgage is already paid off, these individuals can use cash to purchase a property and become the owners without any binding contracts or fees.
Seeking free and clear refinancing? If so, we here at AHL Hard Money Network can help. Learn more about our services and connect with a member of our team via phone at 941-877-4311, or email us at PULLEQUITYOUTOFHOMENOW2018@gmail.com. We look forward to working with you soon!