Title Insurance FAQs

Title Insurance faq

WHAT IS TITLE INSURANCE?

A title insurance policy protects property owners policy protects property owners and lenders from losses that may occur as a result of title disputes. Essentially, you want to ensure that the seller has the legal right to sell the property and that when the transaction is completed, you actually own it.
Title insurance is important because it protects you from title risks that could jeopardize your financial investment in your home or other property. It also safeguards the lender’s investment.



What is Lender's Policy?

A lender’s title insurance policy protects the bank or other lending institution that issues your mortgage from any losses resulting from property ownership disputes. A lender’s policy covers the loan amount, and the cost is based on the loan amount. The majority of lenders require this coverage, which expires when the mortgage is paid off.



What is an Owner's Policy ?

An owner’s title insurance policy ensures that the buyer has legal ownership of the property. The cost is based on the sales price. Policy lasts as long as the owner maintains a financial interest in the property.



When do you need Title Agency?

PURCHASE
1st meeting with Realtor
Signing of sales contract
REFINANCE
1st meeting with Loan Officer / Lender / Mortgage Professional



DO I HAVE TO PAY A MONTHLY PREMIUM FOR TITLE INSURANCE?

Title insurance is usually purchased for just a one-time fee when the real estate transaction is completed. Insurance benefits are paid in the name specified on the policy. Coverage is valid for as long as you own the property.



WHAT DOES TITLE INSURANCE COVER?

Owner’s title insurance protects you from the following risks:

Fraud in connection with title ownership.
Liens against the property that existed at the time the policy was issued.
Errors in the public record that are not discovered prior to the sale.
Incorrect or conflicting wills and trusts pertaining to the title.
Missing heirs who appear unexpectedly and claim ownership of the property.
Deeds and other documents that have been forged or misfiled.
Title errors or flaws that are not discovered during the initial title examination.
Lender’s title insurance protects the lender’s interest in the property and covers the amount of the mortgage loan if any of the above risks occur.



WHO PAYS FOR TITLE INSURANCE ?

In NJ,NY and PA buyer pays for the owner’s policy



HOW ARE RATES FOR TITLE INSURANCE DETERMINED?

The regulations governing title insurance rates vary by state



What type of protection does title insurance provide?

Title insurance will require an extensive title search of the property. This search will minimize the potential liability to the property owners by discovering any foreseeable title issues. However, once a property owner purchases and takes possession of a property, title insurance will defend against any litigation that challenges the validity and legality of the new property owner.



How much does title insurance cost?

Unlike traditional insurance companies where monthly payments are required, title insurance only requires a one-time payment. This insurance will vary according to the price on your home and according to the state that you will purchase a home.



When Should You Get Title Insurance ?

You should get title insurance before you sign any contracts for the sale of a property.
This protects you from issues that could come up with the seller’s title. Many title insurance companies require you to have a home inspection as well. The inspector looks at the property to make sure there are no major problems. This can be done when the house is being built, as well as after it has been completed. The results of the inspection go into the homeowner’s insurance policy. You should make sure that whoever is buying the house has enough money to cover their portion of the closing costs. It is also important to be sure that you have enough money to cover your part of the deal. You need to have enough cash available to pay the closing costs on the house, including the down payment, inspection costs, and any other amounts due when you close on the property.



What are Common Title Disputes ?

Some common title disputes that may arise include, but are not limited to:

Forgery of a deed or fraud committed during the execution of a deed
Unpaid real estate taxes
Undisclosed or missing heirs to the estate or heirs born after the execution of a will who later claim ownership of the property
Wills or trusts that have not been properly probated
Errors in researching the title and in recording and filing required legal documents.

Any of these issues can place your claim of title to the property in jeopardy. Without title insurance, the homeowner will be left to defend the claim on their own and pay for any financial losses out of their own pockets.