Securing title insurance for a home can be overwhelming. The following FAQ list answers the questions that most buyers tend to have about title insurance; but it is by no means exhaustive. Scott Title Services, based in Red Bank, NJ, provides experienced professional title insurance services. Please contact us if you have any further inquiries after reading.
What is title insurance?
A title is someone’s legal ownership of a piece of property. Title insurance protects the title holder from future claims made against the title. For example, if in the future it comes to light that the property’s deed was forged, or if a previous owner’s heir claims a right to the property, the holder of the title insurance policy will be protected.
What does a title insurance agent do?
A title insurance agent researches and thoroughly examines the state of the property’s title. The title insurance agent will perform a search of public records to look for any defects in the current title, such as a lien against the property from unpaid taxes.
What are the different types of title insurance?
There are two types of title insurance: insurance for the buyer, and insurance for the lender. Insurance for the buyer is called an Owner’s Policy. An Owner’s Policy protects the buyer of the property from future claims and covers any legal defense fees if a claim proves to be valid. Lender’s title insurance is called a Loan Policy. Most lenders require a Loan Policy when they issue a mortgage loan.
How is title insurance paid for, and how long does coverage last?
The party that pays for title insurance varies depending upon where your real estate transaction is taking place. In New Jersey, it is typical for the buyer to purchase title insurance as part of total closing costs.
The purchaser of title insurance pays once but receives coverage for as long as he or she retains an interest in the property. Title insurance is a one-time investment that can protect a homeowner from huge losses in the future.
How do I recognize an excellent title insurance agent?
An experienced title insurance agent knows the potential problems that could arise and what to look for when searching the title’s records, mitigating against the risk of future valid claims being issued against the title holder. If any defects are detected, the title insurance agent will work to fix these problems before the real estate transaction is complete.
When does a buyer typically start thinking about buying title insurance?
If you are in the process of buying a house, and you have recently signed a contract of sale, now is the time to begin the process of procuring title insurance. If you would like Scott Title to look at the history of the property you are purchasing, please contact us and we can begin the process of protecting your title.