Title insurance is a critical component for anyone purchasing a home. Title insurance was designed to protect real estate owners and lenders from property loss or damage they may experience due to liens, defects or encumbrances in the title of a property.
Title insurance is key because it insures for events that already passed in the history of the real estate property and the people who previously owned it. Insurance is critical for purchasers and lenders to insure themselves against any possible title defects that can occur.
However, specific terms, conditions and exclusions vary from title to title. Here are five questions to ask when applying for title insurance.
Five Things to Know About Title Insurance
- How a title insurance policy is created: An escrow officer or lender is in charge of opening a title order.1 The attorney or title agent will perform a title search and a preliminary report will be created for customer review and approval. All closing documents involved will be recorded at the escrow officer’s discretion. After all recording has been confirmed, all funds will be disbursed, demands paid and the actual title insurance policy will be created.
- There are two different title insurance policies when buying a home: When the buyer secures a mortgage to complete the purchase of a home, the lender requires a type of title insurance policy designed to protect the lender’s interest in a property.2 The other type protects the owner, but only if the owner buys it. The owner’s title insurance policy protects their interest in the property and is subject to conditions, exceptions, requirements and exclusions.
- Homebuyers have the right to pick their title insurance company of choice: Homebuyers are not obligated to obtain title insurance through a select title company. The Real Estate Settlement Procedures Act ensures that homebuyers have the right to select providers of various settlement services, which includes title insurance companies.
- Obtaining title insurance only requires a one-time payment: A title insurance premium is a one-time fee paid at closing. Coverage is included in the policy but only lasts as long as the insured party or their heirs hold interest with the property.
- Title insurance is not the same as homeowners insurance: Both are similar in function but cover separate aspects of your home and property. Homeowners insurance covers loss or damages that occur to your home on your property, other structures on your property or to personal property in your home.3 Title ownership only protects your ownership of the real property, guaranteeing your entitlement to it and preventing anyone else from trying to claim ownership of it.
Obtain Title Insurance Quickly with Eastern Title & Settlement
Obtaining a title can be a confusing process, especially if you’re in the middle of a move or in the process of finalizing the purchase of a home. However, it doesn’t have to be with Eastern Title & Settlement’s commercial and residential purchase agreements, title insurance and settlement services.
We bring more than 20 years of combined experience to the table to help simplify the title process. Our experience and dedication to customer service will help you complete your purchase agreements, land titles, refinancing or any other significant residential or commercial real estate transactions efficiently, quickly and effectively. We also have expertise in handling real estate closings, land titles and purchases in five different languages – English, Spanish, German, Chinese and Vietnamese.
Don’t hesitate to reach out to Eastern Title & Settlement the minute you feel unsure of where to start. Contact us today and we’ll help expedite the title process for you, ensuring you get the settlement you want quickly.