If you are a new homebuyer, you've probably discovered that there is a lot to know about buying a home. It's important to use professionals to help you through the process. A loan officer, an agent, a title company, and home inspectors are all here to help you. This week, I'll focus on the title company:
What does a title company do? Title insurance professionals examine and research public records
to see if there are any problems or defects that could cause you legal issues or "cloud" title. They may also manage the closing process. The title professional ensures the title search is completed, writes the title insurance policy and works to reduce your risk of ownership issues in the future.
What is title? It is your ownership right to your property. As a homebuyer, you don't want to inherit existing debts or legal issues that could interfere with your property rights in the future.
What is a title search? A search of title to uncover issues that could limit your rights to the property. The title search protects you from unknowingly inheriting a previous owner's debts, legal obligations or other title problems. If a title issue is discovered, most often your title professional will work to resolve the issue. After the title problem is fixed, you can purchase owner's title insurance.
What is title insurance? It provides assurance that the title insurance company will stand behind the owner if a covered title problem arises after the home is purchased.
Are there different types of title insurance? Yes, there are TWO. An owner’s policy and lender’s policy.
1. In Monterey County, the owner’s policy is usually purchased by the seller.
2. In Monterey County, the lender’s policy is usually paid for by the buyer. It is almost always required by the lender and only protects the lender’s interest. Title issues may include forgery, fraud, or clerical errors. The lender's policy is usually discounted if it is being issued in conjunction with owners policy. If the owner's policy is not issued for some reason – the lender's policy may cost more.
Source: Chicago Title