Title Insurance FAQs
WHAT IS TITLE INSURANCE?
A title insurance 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