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Q:
What is title insurance? |
A:
When you buy
a home, you are given a title to the property, which
generally means you receive full legal ownership.
Sometimes, there is a hidden mistake in a prior
deed, will, mortgage, etc., that may give someone
else a valid legal claim against your property!
For new homebuyers, title insurance protects against
loss if a covered defect is found in the title to
your home. It offers you 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. Having title insurance
can save you money, time, trouble, even your home!
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Q:
What are the different types of title insurance?
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A:
There are two types of title insurance: Lender's
title insurance and Owner's title
insurance. Most lenders require a loan
policy when they issue you a loan. The loan policy
is usually based on the dollar amount of your loan.
It protects their investment (the mortgage) and
protects them against loss should a title problem
arise. The policy amount decreases each year and
eventually decreases as the loan is paid off.
Lender's title insurance only protects the lender.
It does not protect the owner. (FAQ - Doesn't
the lender's title insurance protect the homeowner?)
No. A lender's policy protects only the lender's
interest in the property should a problem arise.
It does not cover the owner's equity in the property,
and will not pay the homeowner's legal expenses
if there's a title problem. Only an owner's title
insurance policy will protect the homeowner.
Owner's title insurance is usually issued for
the amount of the real estate purchase. You pay
a one-time fee at closing and lasts as long as
you or your heirs have an interest in the property.
This may be even after you have sold the property.
Only an owner's title insurance policy fully protects
the homeowner should a title problem arise that
was not uncovered during the title search. An
owner's policy can also protect you by paying
for any legal fees involved in defending a claim
to your title.
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Q:
What does an owner's policy provide? |
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A: |
1. |
Protection
from financial loss due to claims against
the title to your home, up to the face amount
of the title policy. |
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2. |
Payment of legal
costs if the title insurer has to defend your
title against a covered claim. |
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3. |
Payment of successful
claims against the title to your home covered
by the policy, up to the face amount of the
policy. |
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Q:
How does title insurance differ from other types
of insurance? |
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A:
Title insurance is substantially different
from other types of insurance coverage. Title insurance
emphasizes risk prevention rather than risk assumption,
so the coverage offers the best possible opportunity
to avoid claims and losses in real estate transactions.
Because of the important corrective work that
title professionals perform, it is rare for lenders
or homeowners to suffer a loss under their title
insurance policy.
The majority of the title insurance premium goes
toward the exhaustive research and due diligence
work done by Realty Title upfront, while a small
percentage goes toward the payment of claims.
Title insurance is charged only once at closing,
where other forms of insurance typically require
monthly or quarterly payments.
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Q:
What is a title search? |
A:
A title search is a close examination of
all public records that involve title to a specific
property. The search is conducted to verify that
there are no liens or other claims against the property
other than those scheduled to be erased at closing
if done for a purchase. A title search verifies
that all former owners have formally given up their
rights to the property.
Title searches typically include documents filed
during the previous 30-years.
The person conducting the search looks at items
such as past owners and deeds, wills, trusts,
mortgages, judgments, and other liens.
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Q:
Why does the buyer need title insurance?
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A:
Even the best title search, performed by
the most experienced and capable experts, cannot
ensure that no title hazards exist. Some problems
just aren't revealed in public records. Years ago,
there may have been an honest mistake in determining
the status of title. Or today, a previously unknown
heir may come forward to claim ownership or a deceased
relative's property. To help protect you in these
events, Realty Title can issue you an owner's title
policy. This will insure you against most of these
unforeseen problems. We not only help to remove
the flaws that show, we also insure against those
that may not show.
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Q:
My lender has a mortgage title insurance policy
on my property. Isn't that enough? |
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A:
No, it is not enough. If there is a complete
failure of title, you have no protection and could
lose both your property and equity in the property.
A mortgage title insurance policy protects only
the lender's interest in the property, not the
current owner's. That is why Realty Title provides
owners' title insurance policies, to protect the
owner's interest in a piece of property should
a claim arise. Purchasing an owner's title insurance
policy at the same time that the lender orders
the mortgage title insurance policy can result
in a savings.
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Q:
Who is your underwriting company?
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A:
We issue our title insurance
on one of the World's top underwriters, Stewart
Title Guaranty Company.
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