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What Is Title
Insurance? Title insurance is insurance that protects against any defects in a person’s title(ownership) to a particular property. As we mentioned earlier, when you first apply for the loan with your mortgage company, the loan officer orders a title exam with our office. We then order the exam with one of our qualified examiners. The examiner goes to the registry of deeds for the county in which the property lies to examine the title. He/she will look to see that there are no liens for things such as mortgages/judgments/tax takings etc. However he/she can only examine those documents that are properly recorded. If there is a deed or mortgage that was not recorded, title insurance will protect against such a claim. Also if there is human error on the part of the title examiner, title insurance will protect you against that claim. There are two elements to title insurance: lender’s title insurance and owner’s title insurance. Lender’s title insurance is to protect the lender. It is required in every transaction and the cost is $2.50/ thousand borrowed. Lender’s title insurance only protects the Lender, not the owner of the home. Therefore, your down payment and any equity in the home is not protected. Also, if there is a title problem that affects the owner but not the lender, the title insurance company will not cover the claim. |