Frequently Asked Questions
Why purchase Owner's Title Insurance?
When you buy real estate you expect to obtain clear title to the property you purchase. If challenged and you successfully defend your rights of ownership in court, there probably will be legal fees and cost to be paid. If your defense fails, you could lose the property, or at least experience a serious financial loss. According to title insurance experts, owner's title insurance is necessary, even if your real estate attorney performs a title examination and assumes liability for his work.
is a title?
Why is transferring title to real estate differ from transferring to title to personal property, such as a car?
estate is permanent and can have many owners over the years, as well as rights
to use the property. In order to transfer clear title to real property, it is
first necessary to determine the rights outstanding on the property.
What is a title search?
A title search is a detailed examination of the historical records concerning a property. These records include deeds, mortgages, court records, property and name indexes, taxes and many other documents. The purpose of the search is to verify the property owner's right to sell or finance the property and to discover any claims or defects to the property.
What kind of problems can a title search reveal?
title search can reveal several types of defects in title, liens, encumbrances
and restrictions. Among these are unpaid taxes, easements, unsatisfied
mortgages, judgments against the property owner and restrictions of use or
What is title insurance?
insurance is a policy of protection against loss if any of the problems listed
above result in a claim against your ownership.
How does title insurance protect my investment if a claim should arise?
claim is made against your property, title insurance, in accordance with the
policy, will assure your legal defense, including paying court costs and related
fees. If the claim proves valid, you will be reimbursed for your actual loss up
to the face amount of the policy.
What are the different types of title policies?
are two types of title policies- a lender's policy and an owner's policy. The
lender's policy protect the lender's interest in the property as security for
the outstanding balance under the buyer's mortgage. The owner's policy protects
the buyer's investment in the property up to the face amount of the policy.
What is a HUD Settlement Statement (HUD-1)?
is a summary of the financial portion of the real estate transaction. The HUD
will list the purchase price, loan amount, closing costs for both buyer and
seller and show all pro-rations and sums to be disbursed by the title company to
What is pro-ration of property taxes?
is the process of charging either the buyer or seller for their share of real
estate taxes owed on the property for their respective time of ownership. Taxes
are said to be "pro-rated" back or forward to the due date of the
What is pre-paid interest?
This is interest due from the date of a loan closing to the first day of the following month. Most loans require payments to be due on the first day of the month. Each monthly payment reflects the principle and interest due on the loan for the previous month. A loan closing on the 20th day of the month will require interest adjustment through the 1st day of the following month. The first payment will then be due on the 1st day of the month following. Interest adjustment is considered a settlement charge and will be disclosed on the HUD.
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