Free and Clear

AAA

DEFINITION of 'Free and Clear'

A slang phrase describing the situation of someone when he or she gains outright ownership of an asset, such as when it is completely paid off and no creditor has a claim on the property.

INVESTOPEDIA EXPLAINS 'Free and Clear'

The phrase is probably most commonly used in reference to one's mortgage. If your house is completely paid off, you own your house "free and clear."

In the case of real estate, before a sale can occur, the property must be "free and clear" so the buyers know that there are no prior claims on it.

RELATED TERMS
  1. Mortgage

    A debt instrument, secured by the collateral of specified real ...
  2. Credit

    1. A contractual agreement in which a borrower receives something ...
  3. Interest

    1. The charge for the privilege of borrowing money, typically ...
  4. Lien

    The legal right of a creditor to sell the collateral property ...
  5. Line Of Credit - LOC

    An arrangement between a financial institution, usually a bank, ...
  6. Total Annual Loan Cost (TALC)

    The projected total cost that a reverse mortgage holder should ...
Related Articles
  1. Credit & Loans

    The Importance Of Your Credit Rating

  2. You're probably moving a lot and still paying off your student loans. Is it crazy to get a mortgage in your 20s? Here's how to decide.
    Credit & Loans

    Does A Mortgage Make Sense If You're ...

  3. The credit crunch and recession caused financial fear, so it's no great shock that our borrowing habits have changed from less than a decade ago.
    Credit & Loans

    How Our Borrowing Habits Have Changed ...

  4. An article explaining the reader when it makes sense to buy home with cash vs taking a mortgage loan. Most time people would think that having the money to purchase the house is better than a mortgage loan but is it always the case?
    Credit & Loans

    Buying A Home: Cash Vs. Mortgage

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  3. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  4. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  5. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
Trading Center