After months of looking at homes for sale in California, you have finally found your dream property. You are about to dot the i’s, cross the t’s, and close on the house. If you are taking out a mortgage, title insurance will be one of the closing costs. The premium is a one-time charge designed to protect the lender, and here’s what you need to know about it and what costs you can expect.
What is title insurance?
Your mortgage lender will order a title search from a title company, which will search for public records related to your home to find anything that could affect the mortgage lender’s or your property rights. These can include liens, which are placed on a property by a contractor, tax authority, or mortgage lender who has not been paid. Easements note someone else’s right to use your property, such as a utility company that has access to utility lines in the backyard, or encumbrances, which include zoning laws, covenants imposed by homeowners associations, and leaseholder rights. If the title company finds any problems, they will also try to resolve them and will reach out to the seller’s agent if needed.
After the title company completes its search, a title commitment is made. This document lists any potential issues, exclusions, or exceptions and states the conditions under which the title company is willing to provide title insurance. Sometimes, the title company will ask the seller to resolve certain problems. The title company will also notify the buyer of existing issues that could cause problems in the future.
There are two kinds of title insurance: title insurance for the loan company and title insurance for the owner. The lender’s title insurance is in effect until the loan is paid off and protects the interests of the mortgage company. The policy ensures the lender has the top claim on the property, which is essential if any claims arise. Owner’s title insurance protects the homebuyer from any previous issues that can occur once you own the home. Both types of title insurance only need to be purchased once.
What does the owner’s title insurance cover?
How much is title insurance?
Where to buy title insurance
Working with a company that provides you with comprehensive information and has strong partnerships with its customers and communities is recommended. Your title insurance agent will walk you through any exclusions in the policy and any outstanding claims made against the property. Finding an agent that will spend time discussing your needs and the specifics of the plans available to you will make you more comfortable in your decision and help you understand what your policy will do. If a claim arises after purchasing a policy, then your title insurance company is required to help you resolve the problem. The company may negotiate on your behalf, such as if an old mortgage is discovered. While the lender’s title insurance will be purchased at closing, you can buy the owner’s title insurance any time after purchasing a house.
Do you need title insurance?
To better understand title insurance and find the best policy that meets your needs, it’s essential to work with a trusted company that knows the ins and outs of the field. Contact Consumer’s Title Company today with questions about owner’s title insurance.