What is Title Insurance?
There are two types of title insurance. The first policy is for the lender. The other policy covers the buyer. Your mortgage company requires you to purchase a title insurance policy on behalf of the lender. It protects the bank’s interests against losses due to undiscovered problems with the title to a property. The lender’s policy does NOT protect the buyer. A separate buyer’s policy protects the buyer against loss due to unknown title defects such as undiscovered liens, fraud or forgeries to name a few.
What do Title Companies Do?
Most of the work that title companies do is done behind the scenes, and long before the actual settlement date. We gather information from multiple sources, including the buyer’s and seller’s mortgage companies, land records and court records. We look for any problems in the current or past real estate transactions and clear any judgements and/or liens against the property or property owner before the current transaction goes to settlement. At the time of closing, we collect and disburse funds from the transaction, transfer title, and issue title insurance after the settlement. Title companies are also responsible for recording the Deed and Deed of Trust in the county land records after closing.
What Can a Title Search Reveal?
A title search can reveal liens against the property and other title defects, including unpaid taxes, unsatisfied mortgages, judgements against the current or prior owner, restrictions for use of the land, and more. Even the most thorough title search may not uncover certain issues. For instance, the previous owner might not have revealed that the property was involved in a divorce settlement. Fraud, forgery and clerical errors can also go undetected. This is why title insurance is so important. It protects both the buyer and the lender and provides peace of mind.
How Much Does Title Insurance Cost?
Title insurance costs a lot less than you might think. Generally the cost of title insurance (including the title search, examination and related services) come to one percent or less of the purchase price of the property owners. And unlike other insurance premiums, which are paid annually, you only pay for title insurance once, and it is good for the entire time that you own the property. If the sellers have a current owner’s title policy, the buyers may be eligible for a discounted rate.
When Will I Know My Final Closing Costs?
By law, your lender must provide you with the Closing Disclosure three days before settlement. This form contains the terms and costs of your transaction. It will generally be close to the loan estimate you received from your lender at the time of application .
What Type of Payment is Accepted?
We accept wire transfer for amounts over $10K and certified, treasurer’s and bank checks made out to Front Door Title for amount less than 10K. Personal checks are only accepted for funds due under $1,000. Each real estate closing situation is different, We will be in close contact with all parties involved to ensure that you are prepared with the correct amount and type of payment.
If you have questions that aren’t addressed here, please feel free to call our office to speak with one of our knowledgeable agents.
Call Front Door Title today at 410-870-7070 to schedule an appointment, or to ask any questions you may have. You can also use our contact form and someone will get back to you shortly. We are always happy to help!