DEFINITION of 'Right Of Redemption'
The legal right of any mortgagor or borrower who owns real estate to reclaim his or her property. Right of redemption gives property owners who pay off the back taxes or liens on their property the ability to prevent foreclosure or the auctioning off of their property, sometimes even after the auction or sale has occurred. However, the amount paid generally also must include the costs incurred in the foreclosure process, plus the entire amount of the mortgage if the payoff comes after foreclosure or auction.
BREAKING DOWN 'Right Of Redemption'
The term "Right of Redemption" can also be used in another sense. Debtors have the right to pay their creditors an amount equal to the fair market value of the assets securing the lien. By doing so, they can reclaim their personal property.