What Do Title Companies Do?
One of the most quiet and delicate aspects of the property buying process is dealing with titles and settlements. Title companies essentially research and detect any defects that occur in the title you are looking to purchase. This includes ensuring that the current owners of the property have the rights to the title and are eligible to sell that property. The most important aspect of the title company is that the consumer has the right, by law, to choose the title company.
What Do I Bring to the Settlement?
There are three main pieces to what you should bring to the settlement.
Who Does the Title Company Represent?
The title company is essentially neutral, and does not represent the buyer, seller, or lender. But, the buyer gets to choose the title company.
Why do I need title insurance?
For a majority of the population, the largest investment is their home. Title insurance protects the borrowers from defects that may occur in the title. These defects can include:
Without title insurance, it is possible that the homeowner will lose money defending themselves or even lose the home.
How does it work?
Title insurance is a one-time fee that is usually bought at closing and last as long as the purchaser owns the property. Title insurance protects the buyer from defects by clearing up any issues with the title or reimbursing the losses.
Why do I need title insurance on a brand new house?
With new homes, the title insurance covers slightly different aspects. The title insurance on a new home protects the buyer from any defects caused by the builder. This ensures that the builder has not used the property as collateral on a loan, and that no problems will surface later.
Is insurance required?
Lender insurance is generally required by the lender, yet owner’s title insurance is not required. The owner’s title insurance may be optional, but it is definitely recommended to all buyers. This insurance is a one time fee and is a smart decision to defend against any defects that can surface.
How is insurance price calculated?
Insurance rates are dependent on the purchase price of the property and the loan amount from the lender’s policies. These rates are set by state insurance commissions.