Free and Clear


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.

BREAKING DOWN '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.

  1. Mortgage

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  2. Lien

    The legal right of a creditor to sell the collateral property ...
  3. Interest

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  4. Credit

    1. A contractual agreement in which a borrower receives something ...
  5. Line Of Credit - LOC

    An arrangement between a financial institution, usually a bank, ...
  6. Encumbrance

    A claim against a property by a party that is not the owner. ...
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