Information

Why Do I Need Title Insurance?

Protection. Title Insurance is designed to both prevent problems from occurring and to give you a source of "protection" if they do. Real estate is one of the most important investments you will ever make and protection should be a necessity.

How Does Title Insurance Work?

Before a transaction involving a loan or sale of property is completed, the title company will conduct a title search in the county records to determine ownership, claims, encumbrances, and any other matters which may affect the property. The results of the title search will be disclosed on a "Commitment for Title Insurance". The commitment  will show the status of the ownership and enables the lender or purchaser to evaluate the legal status of the title to the property before it is acquired. The commitment is also an agreement by the title company to issue a clear title insurance policy upon any requirements on the commitment being met.

What About Problems Disclosed By The Commitment Or Preliminary Title Report?

Should the title commitment disclose any liens, encumbrances, claims, ownership questions, or any other title problems, they must be removed as a part of the transaction. If failed to be removed, they could result in problems for future loans or sales. Once all requirements under the title insurance commitment are met, the title company can proceed with the closing and in issuing a clear title insurance policy.

What Does Title Insurance Protect Me Against If All Defects Are Cleared Before I Buy The Property?

The title insurance policy is issued only after a thorough examination of the title has been done. Although every effort is made to prevent title defects, there are certain defects that cannot be disclosed by a title search. Forgery, fraud, misrepresentation, and legal incompetence are a few examples of problems that could exist, but cannot be disclosed by the title exam. A title insurance policy is the best protection afforded to protect the interest of an owner or lender against such defects.

What is the difference between a lender's policy and owner's policy?

There are two different types of title insurance policies. Owner's title insurance and Lender's title insurance. An owner's policy is issued to the purchaser in the amount of the purchase price. This owner's policy is valid as long as the owner insured owns the property. The Lender's policy is issued to the lender for the amount of the loan and insures the lender of the enforceability of the mortgage that secures the loan.

what will I pay for title insurance?

A one time premium will be paid at closing and there are no additional payments made to maintain coverage. An owner's policy is based on the purchase price, and the lender's policy is based on the mortgage amount. If both policies are issued simultaneously, a discounted premium is always given.