Do I Need Title Insurance?
Absolutely! Title insurance is a means of protecting yourself from financial loss in the event that problems develop regarding the rights to ownership of your property. There may be hidden title defects that even the most careful title search will not reveal. In addition to protection from financial loss, title insurance pays the cost of defending against any covered claim.
What is a Title?
A title is the evidence, or right, that a person has to the ownership and possession of land. It is possible that someone other than the owner has a legal right to the property. If that right can be established, this person can claim the property outright or make demands on the owner as to its use.
What can make a Title Defective?
Any number of problems that remain undisclosed after even the most meticulous search of public records can make a title defective. These hidden "defects" are dangerous because you may not learn of them for many months or years. Yet they could force you to spend substantial sums on a legal defense, and still result in the loss of your property.
What is the Difference between a Lender Title Insurance Policy and an Owners Title Insurance Policy?
Your lender will require that you purchase a Lender's Policy. This policy only insures that the financial institution has a valid, enforceable lien on the property. Most lenders require this type of insurance, and typically require the borrower to pay for it.
An Owner's Policy on the other hand is designed to protect you from title defects that existed prior to the issue date of your policy. Title problems, such as improper estate proceedings or pending legal action, could put your equity at serious risk. If a valid claim is filed, in addition to financial loss up to the face amount of the policy, your owner's title policy covers the full cost of any legal defense of your title.
How much does Title Insurance cost?
The one-time premium is directly related to the value of your home. It is a one-time only expense, paid when you purchase your home. Yet it continues to provide complete coverage for as long as you or your heirs own the property.
What items are needed at closing?
Buyer
- Cashier's check to made payable to Title Company. Many Title Companies are now requiring wired funds.
- Proof of purchase of insurance for fire, casualty, etc., if property is financed.
- Invoices for any unpaid items such as insurance, inspections or any other unpaid items related to the closing. These should be identified prior to the HUD -1 being finalized.
- Photo identification (driver's license, passport, or state-issued identification card)
Seller
- Photo identification (driver’s license, passport, or state-issued identification card)
- Invoices for any unpaid taxes, utilities, assessments, and any other unpaid items that should be paid at closing. These should be identified prior to the HUD -1 being finalized.
