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FAQ
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Q: What is Title Insurance?
A: It's protection against loss if a defect is found in your title. When you buy a home you are given a title to the property that generally means that you recieve FULL LEGAL OWNERSHIP. But, sometimes there's a hidden mistake in a prior deed, mortgage, will, etc.,that may give someone a valid legal claim against the property.
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Q: Why is Title Insurance important?
A: The purchase of a home or other real estate is generally a significant investment, having title insurance can save you money, time, trouble and even your home, if a problem arises in your title.
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Q: What types of coverage are offered?
A: There are two types of coverage offered. The first is a Lender’s Title Policy – this type of policy protects the Lender involved in the transaction (the Mortgage Company) to the extent of their loan. It does not protect the homeowners’ interest. This policy is generally a condition of your mortgage. The second type of coverage is the Owner’s Title Policy. This policy is optional, and it offers the homeowner protection against loss of their interest in the property due to a title problem arising, subject to the terms of the policy
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Q: What is a title search?
A: A title search is a review of the land, court and municipal records pertaining to the property. In conducting a title search, the settlement agent/attorney will confirm that you are purchasing the property from the legal owner, that after settlement all prior liens will be satisfied, that the property will pass free of legal attachments, that the title to the property will be marketable, and to discover any burdens or restrictions effecting the property.
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Q: If a title search is conducted, why is title insurance still important?
A: Although a title search is conducted, the search could still fail to detect some problems that may affect your interest in the property. Some examples of these types of problems are: 1) incorrect information in the public records, 2) unsatisfied liens against the property, 3) claims to ownership from an undisclosed interest (i.e.: missing heirs, marital interests, 4) invalid deeds and/or transfers, 5) fraud or forgeries.
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Q: What is a ground rent?
A: The typical ground rent situation is a 99-year lease, renewable forever, which subjects the owner of the house to pay a "rent" for the land. So long as the ground rent is current, the owner of the land cannot remove the owner of the improvements from the property. The ground rent is identified by an annual payment, which is usually payable in semi-annual installments. Generally, ground rents are redeemable, however those that were created prior to 1884 may not be redeemable. It will be necessary to verify the owner and current payment status of a ground rent in conducting the closing. Please provide this information to the closing agent as soon as possible to avoid unnecessary delays.
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Q: What is a HUD-1?
A: A Hud-1 is the form used for the settlement statement. This form identifies and discloses all of the charges applicable due to the transfer or refinance of the property. It also allows for adjustments or proration of expenses paid for the property over time, for example – water bills, tax bills, homeowner association fees, condominium fees and other assessments. All closing costs are represented on this statement to identify the bottom line paid for the property by the buyer and the bottom line received by the seller.
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