Title insurance is a one-time payment that ensures a property is clear of all hidden liabilities, to protect the buyer's subsequent ownership of the property. When conducting a title search, we inspect the property's public archives for potential claims attached, and correct them before issuing a title insurance policy.
Hidden liabilities can include, errors in public records, liens against the property, claims of inheritance, and fraud.
A lender’s policy, also known as a loan policy or a mortgage policy, protects the lender against loss due to unknown title defects. It also protects the lender’s interest from certain matters which may exist, but may not be known at the time of the sale. This policy only protects the lender’s interest. It does not protect the purchaser. That is why a real estate purchaser needs an owner’s policy.
An owner’s policy protects you, the purchaser, against a loss that may occur from a fault in the ownership or interest you have in the property. You should protect the equity in your new home with a title policy.
- Protection from financial loss due to demands that may be charged against the title to your home, up to the cost of the title policy.
- Payment of legal costs if the title insurer has to defend your title against a covered claim.
- Payment of successful claims against the title to your home covered by the policy, up to the cost of the policy.
For lenders: Title insurance lasts for the terms of the mortgage loan in order to protect their financial state in the property.
For buyers: Owner's title insurance is good for the life of their ownership stake in the property.
A title search is a critical part of the due diligence that should be performed before property closing. Community First Title will perform a title search to identify any title defects or irregularities with the property, such as outstanding tax debts, judgments, liens, easements, restrictions, and encumbrances.
This search will provide you with documentation that you can use to determine whether the seller is in compliance with the title policy that will be issued for the property or explain why further defects need to be brought to the owner's attention to allow for corrective action.
Experience the convenience of Community First Title.