To determine if a home purchase is mortgaged, first review the property’s public records through a county assessor’s office or online database to check for active liens or loans. Second, request a title report from a title company, which details any existing mortgages or encumbrances. Third, contact the seller or listing agent to confirm mortgage details, as they may provide a preliminary title report or loan disclosure.

Checking mortgage status is critical to avoid assuming ownership without resolving liens or foreclosures. Public records reveal legal claims against the property, while title reports confirm current ownership and encumbrances. Data from the 2023 American Title Association (ATA) shows that 15% of homebuyers overlook mortgage verification, leading to disputes worth an average of $42,000 per case. The Federal Housing Finance Agency (FHFA) reports that 1 in 5 U.S. properties had active mortgages in 2022, emphasizing the need for thorough verification. Failure to check may result in assuming liability for unrecorded debts, as seen in a 2021 National Association of Realtors (NAR) study where 8% of buyers faced unexpected liens post-purchase. Proactive verification minimizes financial risk and ensures compliance with state-specific disclosure laws, such as California’s Civil Code § 1102 requiring sellers to disclose mortgage details. This process safeguards both buyer and seller interests, aligning with industry best practices to reduce transactional friction.