Questions about Title!

 

What is title?
Title is a collective term that makes up your legal rights to own, possess, use, control and dispose of land. Title takes into account all previous ownership, uses and transfers. In order to legally transfer real estate property, a title search must be performed and in most cases the title must be determined as clear, or free of defects or encumbrances.

What is Title Insurance?
 Title insurance is an insurance policy that protects against future loss, should the title condition be any different than when the policy was written.

Why do I need Title Insurance?
There are two types of title insurance policies: a lender's policy (also called a loan policy) and an owner's policy. The lender's policy financially covers the amount of a loan and provides protection to the lender. A lender's policy does not usually represent the full property value. An owner's policy protects the landowner and can financially cover the full property value. While a loan policy is often required as a part of a real estate transaction, an owner's policy is generally considered optional.

With an owner's policy, the landowner is protected against any title loss, which ensures the value of the property. Because a title policy is considered insurance, if a claim is made against the title, the title insurer must pay any and all costs associated with defense  against the challenge, and if unsuccessful in that defense, reimburse the landowner for any reduction in the value of the land.

Is Title Insurance as important as homeowner's insurance?
Absolutely. Homeowner's insurance typically provides protection against theft, accidental damage, or natural disaster such as a tornado earthquake or hurricane. While these types of loss can certainly be substantial, losses from a defective title could be devastating. If a fire destroys your home, you can rebuild and buy new possessions. If the title to the land fails, you could lose the right to inhabit your home as well as the land it occupies.

How much does Title Insurance cost?
Title insurance probably costs a lot less than you think. Charges vary in different sections of the country, however the important thing to remember is that you pay for an owner's policy of title insurance only once and there are no monthly premiums.

How long does Title Insurance coverage last?
The lender's policy of title insurance lasts until the mortgage is paid in full. An owner's policy of title insurance lasts for as long as you or your heirs retain an interest in the property.