Title and title insurance are important parts of buying a home with confidence. These are also one of the least understood aspects of that process. We’ve provided the answers to some of the most commonly asked questions our title professionals are asked below. Don’t see the answer to your question? Click here to contact us online or call (337) 477-8782.
What is title?
Title is the ownership record of the property. It is your right to own or use your property. Title also establishes any limitations on those rights.
What is a title search?
A title search is an early step in the homebuying process, conducted of the public records, to uncover issues that could limit your rights to the property. If a title issue is discovered, very often your title professional will take care of it without you even knowing. If a bigger issue is discovered, they will discuss with you and work on resolving the problem so your home purchase can proceed. After the title search is complete, the title company can provide a title insurance policy.
What is title insurance?
Title insurance is protection against loss arising from problems connected to the title to your property. Title insurance is a policy that protects your investment and property rights. There are two different types of title insurance: an owner's policy and a lender's policy.
- An owner's policy is the best way to protect your property rights.
- A lender's policy is usually required by the lender and only protects the lender's financial interest.
Why should I purchase owner's title insurance?
Owner's title insurance protects your investment in your property from future legal claims regarding ownership of your property. For a one-time fee, you and your heirs receive coverage for as long as you own your home. The owner's policy also covers potential legal fees and court costs for settling claims covered by your policy.
What does owner's title insurance cover?
Sometimes undiscoverable defects can come up after the title search. Under an owner's title insurance policy, you are protected against certain undiscovered errors in the title, as well as any unforeseeable title claims.
What does owner's title insurance cost?
The one-time payment for owner's title insurance is low relative to the value of your home.
How long am I covered?
Your owner's title insurance policy lasts for as long as you or your heirs own your property.
Is title insurance obligatory?
It is if you are taking out a mortgage to finance your home purchase. All mortgage lenders require title insurance protection for an amount equal to the loan. This coverage lasts until the loan is repaid. As with mortgage insurance, it protects the lender, but you pay the premium, which is a single-payment made upfront.
Why do I need to purchase a new policy when I refinance?
You don't need a new owner's policy, but the lender will require you to purchase a new lender policy. Even if you refinance with the same lender, the existing lender's policy terminates when you pay off the mortgage. The lender is concerned about title issues that may have arisen since you purchased the property, such as a lien, for example. A new title search will uncover the lien, and you would have to pay it off as a condition for the refinance.
Does title insurance guarantee me that I will be able to sell my property if an unforeseen claim arises?
No. Title insurance does not prevent loss of marketability due to a title claim, any more than flood insurance prevents a flood. If a claim arises, you probably won't be able to sell your property until the claim is settled by the title insurer.