Frequently Asked Questions
What is Title Insurance?
Title Insurance protects lenders and buyers from financial loss due to defects in a title to a property.
Why do I need Title Insurance?
Having no title insurance exposes transacting parties to significant risk in the event a title defect is present. Imagine searching for the house of your dreams only to find, after closing, unpaid property taxes from the prior owner. Without title insurance, the financial burden for this claim for back taxes rests solely with the buyer.
"One out of every three searches reveals a title or public record defect that is fixed before the transaction closes" says Jeremy Yohe, spokesman for the American Land Title Association.
What type of claims/risks are covered by Title Insurance?
Title Insurance protects both lenders and homebuyers against loss or damage occurring from liens, encumbrances, in the title or actual ownership of a property. Common claims against a title include back taxes, liens, and conflicting wills. Unlike traditional insurance that protects from future events, title insurance protects claims for past occurrences.
What is a Title search?
A title search is an examination of public records to determine and confirm a property's legal ownership, and find out what claims or liens are on the property. A clean title is required for any real estate transaction to go through properly.
Is Title Insurance obligatory?
Title Insurance is not required by law, however almost all lenders will require a lender's title insurance policy as a condition of making their loan. A lender wants to protect their interest in the property and a title insurance policy is one way in which they can do this.
How long does a Title Insurance policy last?
The lender's policy of title insurance lasts until the mortgage is paid in full. An owner's policy of title insurance lasts for as long as you or your heirs retain an interest in the property.
Does a borrower have the right to purchase Title Insurance directly?
Yes. Even though it is seldom done, the shopping for the Title and Closing agents is highly encouraged. Most leave it to their real estate agent, lender or attorney to select the carrier.
How much does it cost?
Unlike most insurance policies, where you pay a monthly premium, title insurance is a one-time-only fee directly related to the value of your home. Fees vary by state, so contact us for a quote.