What is a Title?
A title is the legal right that a person has to the ownership and possession of land. It is possible that someone other than the owner has a prior legal claim to the property. If that prior claim can be established, that person may claim an interest in the property outright or make demands on the owner as to its use.
What is Title Insurance?
Title insurance is simply an insurance policy for the title on your home. It protects against loss should the condition of the title to the land be other than what was insured.
Why Do I Need Title Insurance?
When you buy a home, or any property for that matter, you can reasonably expect to enjoy the benefits of ownership – to enjoy and use the property as you see fit. In addition, you should be able to freely sell your property, use it as collateral for a loan, and not be encumbered by any debts or liens that you did not create. Title insurance was designed to cover these rights of ownership in the event of a loss.
What is a Title Search?
A title search is a detailed examination of the historical records of the records. These records can include deeds, court records, property and name indices, birth, death and marriage certificates, and many other documents. The purpose of the search is to verify the seller’s right to transfer ownership of the property and to discover any claims, defects, and other rights or encumbrances on the property.
What can make a Title Defective?
Any number of problems can remain undisclosed after even the most meticulous search of public records and can make a title defective. These prior hidden defects are dangerous because you may not learn of them for many months or even years.
However, they could force you to spend a substantial sum on a legal defense that could still result in the loss of your property. When you purchase Owner’s Title Insurance Policy through Melrose Title and our underwriter Old Republic, you acquire peace of mind. Your policy typically covers you from a host of prior or concurrent hidden defects. Follows is a partial list of some of the most common defects:
- Deeds executed under false or expired powers of attorney
- Mistaken interpretation of wills and trusts
- Incorrect representation of marital status
- Undisclosed heirs
- Mistakes in recording legal documents
- Want of jurisdiction over persons in judicial proceedings
- Deeds from minors or non-existent entities
- Discovery of later will after probate of first will
- Easements by prescription not discovered by a survey
- Deeds delivered after death of grantor or grantee, or without consent of grantor
- Deeds from incompetent persons
*Your coverage will be governed by the terms of the policy, the claim or defect asserted and your factual situation.
What are the two types of Title Insurance?
Your lender will likely require that you purchase a Lender’s Policy. This type of policy only insures that the financial institution has a valid, enforceable lien on the property. It does not protect you.
An Owner’s Policy, on the other hand, is designed to protect you from covered title defects that existed prior to the issue date of your policy. It also covers the full cost of any legal defense of your title, for any covered matter.
How much does Title Insurance cost?
The one-time premium is directly related to the value of your home. Typically, it is less expensive than your annual auto insurance. Paid once when you purchase your home, it continues to provide coverage for as long as you or your heirs own the property.
When should I get Title Insurance?
As soon as both you and the seller sign the earnest money agreement, it’s time to look into Title Insurance. With a brief summary of the details, our team of title professionals will begin a search of the public records and issue a title commitment. In order to make certain that we know all we can about the title, it is wise to get the ball rolling as soon as possible.
Do I need Title Insurance?
Most definitely. Title insurance is a means of protecting yourself from actual financial loss in the event that problems develop regarding the rights of ownership to your property. There may be hidden defects that even the most careful title search will not reveal. In addition to protection from a covered financial loss, title insurance pays the cost of defending you against any covered claim.
My Lender Has Title Insurance for the Mortgage; Do I Need An Owner’s Policy?
The lender’s policy only covers the lender for the amount for the amount of the mortgage, which is usually NOT the full value of the property. Most financial institutions require lender’s title insurance prior to issuing a loan. The important thing to remember is that the Lender’s Policy only covers the Lender. The small additional expense of an owner’s policy is a bargain when you consider that an Owner’s Policy will protect you against the full property value of the home.
What if I have a problem? Do I lose my property if I make a claim?
At the first suggestion of a problem with your Title, you should contact your title insurer or the agent who issued your policy. Your policy includes coverage for legal expenses which may be necessary to investigate, litigate, or settle a claim.
I’m Refinancing. Do I need Title Insurance?
When you refinance your home you are obtaining a new loan, even if you are using the same lender. Your property will require lender’s title insurance to protect their investment, but the original policy you received when you first closed on your home is good for as long as you and your heirs have an interest in the property.
If it has been less than 10 years since you bought your home (or refinanced), ask for a reissue credit from your title services agency.
Our manager, processors, and closers have more than 30 years of combined experience in the title industry. Complementing that experience is the fully staffed legal team of Howard & Howard Law, who is available to assist us at any time for matters that require legal review.
Our reputation is only as good as the service that precedes it. Therefore, we work daily to respond readily to your needs and perform our complex tasks with great accuracy. It is vital, too, that you choose a title insurance company with the financial strength and stability to meet its obligations regardless of what the market is doing over the long term.