Investopedia explains 'Unencumbered'
For the majority of consumers, especially young couples and recent graduates, high-value assets such as real estate and cars are unlikely to be unencumbered, since these purchases are generally financed with debt. Over time, as the mortgage or car loan is paid off, these assets become unencumbered. A title search is a key part of the due diligence process for a buyer of real estate or a used car to check if the asset is indeed unencumbered or has outstanding liens.
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