What is title insurance?
Nearly all mortgage lenders require Title Insurance. It protects them against financial loss caused by problems with your home’s title. It is important to know that this insurance only protects your lender, not you.
What does a title company do?
Before you take possession of a piece of property, you have to make sure that the seller has the LEGAL RIGHT to sell the home. Title companies are highly useful. Their primary duty is to CONDUCT AN ABSTRACT on a title, which is done through a TITLE SEARCH. Moreover, a title company can reveal liens or judgments against a property and other property restrictions.
What are closing costs?
Fees associated with obtaining a mortgage. These fees are paid at closing out of the loan proceeds. Lenders may charge fees for processing, origination and other miscellaneous services. Your mortgage broker may also charge a fee based on the loan amount. The title company will collect fees for conducting the title search and closing. Your lender will also require title insurance, which is usually paid for by the borrower.
What can make a Title Defective?
Any number of problems that remain undisclosed after even the most meticulous search of public records can make a title defective. These hidden “defects” are dangerous indeed because you may not learn of them for many months or years. Yet they could force you to spend substantial sums on a legal defense, and still result in the loss of your property.
But the lender already requires Title Insurance, won’t that protect me?
Not necessarily. There are two types of Title Insurance. Your lender likely will require that you purchase a Lender’s Policy. This policy only ensures that the financial institution has a valid, enforceable lien on the property. Most lenders require this type of insurance, and typically require the borrower to pay for it.
An Owner’s Policy on the other hand is designed to protect you from title defects that existed prior to the issue date of your policy. Title troubles, such as improper estate proceedings or pending legal action, could put your equity at serious risk. If a valid claim is filed, in addition to financial loss up to the face amount of the policy, your owner’s title policy covers the full cost of any legal defense of your title.
How much does Title Insurance cost?
The one-time premium is directly related to the value of your home. Typically, it is less expensive than your annual auto insurance. It is a one-time only expense, paid when you purchase your home. Yet it continues to provide complete coverage for as long as you or your heirs own the property.
When should I look into purchasing Title Insurance?
Call Nexus Title & Escrow as soon as you and the seller sign the earnest money contract. With a brief summary of the details, our team of title experts will begin a search of the public records and issue a title commitment. Because there are a number of steps, we must take to make certain that we know all we can about the title, it is wise to get the ball rolling as soon as possible.
Should I shop around for the best Title Insurance deal?
Some states closely regulate rates. Others permit open competition, often resulting in significant differences between title insurers on rates and coverage. Depending on where you live, it pays to investigate your options carefully in order to obtain the most complete coverage.
Can my title company handle the closing?
Yes, in most areas of the country. Nexus Title & Escrow or its affiliates act as a central clearinghouse for the parties involved — collecting necessary documents, ensuring adherence to the lender’s title instructions, making arrangements for proper payment and distribution of funds. We are fully prepared to work with you from the beginning of your transaction all the way through to conclusion.
Benefits of Title Insurance
Title insurance issued by Nexus Title & Escrow is underwritten by Old Republic, a 100-year-old company that provides a broad range of benefits to the parties involved in a real estate transaction.
To the Purchaser of Real Estate…
The purchaser of real estate needs protection against serious financial loss due to a defect in the title to the property purchased. For a single, one-time premium, which is a modest amount in relationship to the value of the property, a buyer can receive the protection of a title insurance policy – a policy that is backed by the reserves and solvency of the Company. A title insurance policy will cover both claims arising out of title problems that could have been discovered in the public records, and those so-called “non-record” defects that could not be discovered in the record, even with the most complete search.
A title insurance policy will not only protect the insured owner, but also those person’s heirs for as long as they hold title to the property, and even after they sell by warranty deed. The Company will not only satisfy any valid claim made against the insured’s title, but it will pay for the costs and legal expenses of defending against a title claim.
To the Lender…
The overwhelming majority of mortgage loans made in the United States are made by persons who are acting in a fiduciary capacity – by savings and loan associations, savings banks, and commercial banks on behalf of their depositors, and by life insurance companies on behalf of their policyholders. Because they are lending other people’s money (other people’s savings or policyholder’s funds) these lenders must be concerned with the safety of their mortgage investments.
A policy of title insurance provides a mortgage lender with a high degree of safety against the loss of security as a result of a title problem. This protection remains in effect for as long as the mortgage remains unsatisfied.
Nexus Title and Escrow, LLC also provides lenders with in-depth expertise on a wide variety of title related matters to facilitate the mortgage loan process.
To the Seller…
An owner of real property whose interest is insured by an owner’s title insurance policy has the assurance that the title will be marketable when selling the property. The title insurance policy protects the seller from financial damage if the seller’s title is rejected by a prospective purchaser. Also, when the seller conveys with “warranties,” the seller is still protected if the buyer sues because of a breach of those warranties.
To the Real Estate Attorney…
Title insurance enables the real estate attorney to provide the client with substantially greater protection than would be afforded by the attorney’s opinion alone. The attorney’s opinion is generally limited to recorded matters and the client can only recover from the attorney if the attorney is found to be negligent. (Remember the case of Watson v. Muirhead that prompted the creation of title insurance?)
To the Real Estate Broker…
The title insurance company and the real estate agent both seek to ensure that as many purchases as possible are closed to the satisfaction of all the principals in the transaction. From the broker’s standpoint, the efficient and safe transfer of title will result in client satisfaction, increased prestige, and continued business.
Apart from the security that title insurance offers, most brokers have experienced numerous instances in which title insurance personnel have enabled them to close transactions that otherwise would have been delayed. By helping to avoid delays, Nexus Title and Escrow, LLC is able to facilitate the job of the real estate broker and to minimize the inconveniences and costs to the homebuyer.
To the Home Builder…
By providing various title insurance services and information to the home builder, the title insurance industry can and does assist the builder in identifying and evaluating building and use restrictions, easements, etc., in removing title problems that may arise, and in facilitating prompt and needed disbursement of construction funds from the construction lender. All of these services ultimately rebound to the benefit of the buyers of newly constructed homes.