I am considering paying off my mortgage. I have been told that in the event of a law suit of any kind that it is better to have a mortgage as having one provides some kind of legal protection or at least limits any potential financial penalties.
Answer
The mortgage company has a primary lien on your house. Therefore, if you are ever sued and a judgment is obtained against you, the house is protected from your creditors because the mortgage company has a first position on the property, and any judgment creditors have to deal with the mortgage company before they can touch your house. If you have no mortgage, then a judgment creditor may execute against your house directly.
No comments:
Post a Comment