For many, real estate transactions and closing on a property are new experiences with many important questions. To help, we put together a list of some of the most common questions and answers to those questions. If you have a question not answered here, please contact us.
When paying cash for a new home, there are no laws or regulations stating you must purchase owner’s title insurance, although an owner’s policy protects you against the acts of previous owners, mortgages, judgments, etc., filed on public record.
A lender’s policy insures only the bank or mortgage company holding the mortgage on your real property against any title defects. An owner’s policy protects you as the fee owner of the real property.
You should definitely consider purchasing an owner’s title insurance policy when buying a condominium. For a one time premium, an owner’s policy will provide protection against defects in your title for so long as you own the condominium.
The title insurance policy purchased on refinancing covers the new lender. It does not protect you. Your title insurance (assuming you purchased an owner’s policy when you bought your home) remains intact unless you have done something to end the coverage.
If you purchased an owner’s policy, the title insurance company would be required to defend the claim in court for the one time fee you paid for the policy.
Buyer’s title insurance (also known as an owner’s policy) protects you, as the new owner of the real property, from debt or obligations not created by you for the duration of your ownership, whether it be 1 year or 100 years.
The low, one time fee over the lifetime of ownership, is generally worth the investment for peace of mind.
Title insurance is designed to insure your rights to the real property you own. When you own a home or any real property, you want to be sure the real property is free of debts or obligations not created by you. Title insurance is designed to protect you.
Title insurance coverage varies, but key examples include:
- Forgery
- Lack of competency, capacity or legal authority of a party
- Deed not joined in by a necessary party (co-owner, heir, spouse, corporate officer, or business partner)
- Undisclosed (but recorded) prior mortgage or lien
- Undisclosed (but recorded) easement or use restriction
- Erroneous or inadequate legal descriptions
- Lack of a right of access
- Deed not properly recorded
You should consult with a title representative for specific coverage information.
Title insurance fees vary depending on the value of your real property. The premium is a one time fee and the coverage continues for so long as you have an interest in the real property.
Title insurance is an insurance policy protecting the insured against loss should title to the real estate be different than insured and documented.
- You will be given a copy of the purchase agreement from your realtor and/or your lender.
- We will contact your seller’s closer and request an undated abstract of title, if applicable, so we can examine and deliver title work to your lender.
- If title insurance is required by you or by your lender, we order a “plat drawing” or “property sketch”. The purpose of doing so is to show that the house is within the boundary lines of the property.
- We will contact your seller’s closer to obtain payoff figures for any mortgage or liens the seller may have on the property.
- At closing, we retain the amount of the seller’s proceeds necessary to pay off such liens and record satisfactions or releases at the county recorder’s office.
- At closing, we go through your settlement statement to show you an itemization of all the costs. We will explain the terms of the promissory note, mortgage and other documents.
- Throughout the buying process you are encouraged to contact us with any questions.
