Frequently Asked Questions
- What is title insurance?
- Why is title insurance important?
- What types of coverages are offered?
- What is a title search?
- If a Title Search is conducted, why is title insurance still insurance?
- What is a HUD-1?
- What does Title Insurance cost?
- What happens at a closing?
- What is Title Insurance?
- Why is title insurance important?
- What types of coverages are offered?
- What is a title search?
- If a Title Search is conducted, why is title insurance still insurance?
- What is a HUD-1?
- What does Title Insurance cost?
- What happens at a closing?
Title Insurance is an insurance policy which protects the insured against loss of his/her interest in the property due to legal defects in title which were present prior to you taking title to the property.
The purchase of a home or other real estate generally represents a significant investment. Having title insurance can save you money, time, trouble and even your home, if a problem arises in your title.
We offer both a Lender's Title Policy and an Owner's Title Policy. A Lender's Title Policy protects the Lender involved in the transaction (the Mortgage Company) to the extent of its loan. It does not protect the homeowner's interest. This policy is generally a condition of your mortgage. The Owner's Title Policy is optional, and offers homeowners protection against loss of their interest in the property due to a title problem arising, subject to the terms of the policy.
A title search is a review of the land, court and municipal records pertaining to the property. In conducting a title search, the settlement agent/attorney will confirm that you are purchasing the property from the legal owner, that after settlement all prior liens will be satisfied, that the property will pass free of legal attachments, that the title to the property will be marketable, and that there are no burdens or restrictions affecting the property.
Although a title search is conducted, the search could still fail to detect some problems that may affect your interest in the property. Some examples of these types of problems are: 1) incorrect information in the public records, 2) unsatisfied liens against the property, 3) claims to ownership from an undisclosed interest (i.e.: missing heirs, marital interests, 4) invalid deeds and/or transfers, 5) fraud and forgeries.
A HUD-1 is the form used for the settlement statement. This form identifies and discloses all of the charges applicable due to the transfer or refinance of the property. It also allows for adjustments or proration of expenses paid for the property over time, for example--water bills, tax bills, homeowner association fees, condominium fees and other assessments. All closing costs are represented on this statement to identify the bottom line paid for the property by the buyer and the bottom line received by the seller.
Title Insurance premiums vary from state to state, but are set within the jurisdictions with the Insurance commissions or agencies. It is a one-time premium and the coverage afforded by the policies last for the duration of your ownership in the property, or the existence of the loan, depending on the type of policy issued.
Closing or settlement is the point in time when ownership is transferred or the owner refinances theh property. Various people could be present at the closing--these include the closing agent, you, the seller, real estate professionals involved in the transaction, and bank agents. At closing, all documents necessary to transfer and insure the property will be explained and executed by the necessary parties. Additionally, if a lender is involved, all documents necessary to create the new mortgage against the property. All title costs and settlement costs will be collected in addition to the consideration in the transaction. All funds involved in the closing will be placed in an "escrow account" to assure their proper handling and disbursement. This is your opportunity to ask all the questions you have developed during the period, because when you leave the closing of the property will have transferred and/or have had the financing put in place, creating a lien against the property.