Frequently Asked Questions
What is Title Insurance?
Title insurance is a contractual obligation between a homeowner and/or lender and the title insurance company, wherein the insurer, in exchange for a premium payment, provides protection against future losses that might result from a variety of possible title defects or encumbrances that existed at the time of closing.
Before you purchased your home, it may have gone through several ownership changes, and the land on which it stands went through many more. There may be a weak link at any point in the chain that could emerge to cause trouble. For example, someone along the way may have forged a signature in transferring title. Or there may be unpaid real estate taxes or other liens. Title insurance covers the insured party for any claims and legal fees that arise out of such problems.
What Will Title Insurance Protect Me From?
Some common examples of problems covered by title insurance include:
- Improper execution of documents
- Mistakes in recording of legal documents
- Mistakes in the indexing of legal documents
- Mistakes in legal descriptions of property
- Forgeries and fraud
- Undisclosed or missing heirs
- Unpaid taxes and assessments
- Unpaid judgments and liens
- Unreleased mortgages
- Incorrect interpretation of wills
- Mental incompetence of grantors of property
- Impersonation of the true owners of the land by fraudulent persons
- Fraud in securing essential signatures
- Refusal of lender to provide financing based upon condition of title
- Refusal of potential purchaser to accept title based upon condition of title
What is the Difference Between a Lender’s Policy and an Owner’s Policy?
A lender's policy protects the lender up to the amount of their outstanding debt on a mortgaged property. The value of the policy decreases as the loan principal is paid down and expires when the mortgage is paid in full. An owner's policy is purchased in an amount equal to the purchase price and does not expire when the mortgage loan is paid in full or upon the sale of the property. The owner's policy is there to protect the owner's equity in the property.
What is a Title Search?
A title search is a detailed examination of the historical records concerning a property. These records include deeds, court records, property and name indexes, and many other documents. The purpose of the search is to verify the seller‘s right to transfer ownership, and to discover any claims, defects and other rights or burdens on the property.
When Refinancing my Home Why do I Have to buy Title Insurance for the Bank Again? Didn’t I Already do so When I Purchased my Property and got a Loan?
Yes, you did get it when you got a loan and the Title Insurance you bought protected the Bank that lent you the money from any thing that happened in the past. The Insurance you buy on the date you refinance covers the Bank from the date you last refinanced up to the present. When you refinance you are entitled to a “reissue rate” that discounts the premium lower than what you paid the first time.
Are There any Problems a Search in Title Records may not Reveal?
Yes. there are some “hidden hazards” that even the most diligent title search may never reveal. For instance, the previous owner could have incorrectly stated his marital status, resulting in a possible claim by his legal spouse. Other “hidden hazards‘ include fraud and forgery, defective deeds, mental incompetence, confusion due to similar or identical names and clerical errors in the records. These defects can arise after you‘ve purchased your home and can jeopardize your right to ownership.
Get Started Now