What is Unencumbered Property?
Unencumbered property is any real estate holding that is not currently under a lien or mortgage agreement, or being used as collateral for any type of loan. Because unencumbered property is clear of all debt, the owner does not receive much in the way of tax breaks on the property in many cases. Still, unencumbered property represents a physical asset that is considered to be free and clear for the use of the owner as he or she sees fit. One advantage to unencumbered property is that lenders will often consider the holding to be an excellent collateral for both short term and long term loans. Because the real estate is unmortgaged property, there is less risk incurred by the lender. Landowners may choose to use unencumbered property as a means of obtaining a loan that amounts to far less than the market value of the holding. This will often help to expedite the processing of the loan. For persons who hold several different properties in their possession, it is not unusual for one parce
