What is Title Insurance?
When you buy a home you are given title to the property, which generally means you receive full legal ownership. To sell a home you must have clear title, meaning that there are no mistakes in the title that could give someone else a valid legal claim against your property. Title insurance provides information on the status of the title to land before you buy or refinance and protects against title claims that may affect the title after you buy. According to the American Land and Title Association, title companies find and fix problems with the title to property in 25% of transactions.
How does Title Insurance work?
Before closing, Home Solution Title searches public records for all issues that could affect the title. This is called the title search, and it includes examining the records of the Register of Deeds, Clerk of Court, and other municipal and county offices. These records include recorded documents, judgments, liens, taxes, street easements, sewer assessments, special taxes, and other matters that could affect title ownership. This allows us to determine who owns the property and if there are any existing interests to the title that must be dealt with before the property can be sold or refinanced.
Title Insurance is typically a one-time charge that is paid at closing. Generally, the seller chooses the title company when they list with a Real Estate agent. Title insurance is not required by law, although it is required if you need a mortgage because all mortgage lenders require protection for an amount equal to the loan.
Owner's Title Insurance is usually issued for the amount of the purchase price. The policy lasts as long as you, or your hiers, own the property. An owner's policy typically protects: errors or omissions in deeds, mistakes in examining records, forgery, and undisclosed heirs. Should a problem arise, the policy assures you that your title company will stand behind you monetarily and with legal defense if needed.
Lender's Title Insurance is typically for the loan amount and only protects the lender. The policy amount decreases each year and eventually disappears when the loan is paid off.