What is Title?
Title is legal evidence of a person’s ownership right in property, such as land. Title is also the legal instrument (e.g. the deed) that constitutes such evidence.
What is Title Insurance?
There are two types of title insurance – Lenders Policy (also called Loan Policy) and Owners Policy.
- A Lender’s Policy protects a bank’s mortgage interest in land. The amount of the insurance, typically paid for by the borrower, is based on the amount of the loan and protects the lender’s interest in the property if a problem should arise. It insures the lender has a priority lien on the property.
- An Owner’s Policy protects an owner’s interest in land. The amount is based on the purchase price and protects the owner against any defects in title that may arise. A policy is purchased one time and lasts as long as you own the property. The title insurance company will defend the policy holder in court and pay all court expenses or any losses caused by a defect in title.
Do I need Title Insurance?
Problems were found in over 35 percent of all residential real estate transactions in 2005. These issues can range from unpaid parking tickets to forged documents. Unlike other insurance policies that protect you from incidents in the future, title insurance protects you from past events. Title insurance protects you from all unknown defects from the past that may arise at a future date.
What does Title Insurance protect me from?
There are many defects that may arise and cause issues with your title. Some of these defects are:
- Forged documents
- Missing or undisclosed heirs
- Fraudulent reports from public officials
- Mistakes in filing or recording
- Liens (tax, mechanic)
- Liens that arise between the date of execution of the mortgage or deed and the * date it is recorded
- Deeds from person of unsound mind, contested wills
- Unsatisfied prior mortgages
How much does Title Insurance cost?
The one time premium is based on the purchase price of the property. The rates for title insurance vary from state to state. In New York the rate and all applicable premiums and discounts are set by the New York State Department of Insurance. Other charges such as search fees are not regulated and are set by the company.
What do I need to bring to Closing?
If you are the Purchaser:
- Copy of Contract
- Certified checks for all payments
- Personal checks for misc. expenses
- Proof of home owner’s insurance
- State issued picture identification
If you are the Seller:
- Copy of Contract
- Invoices for unpaid taxes, utilities
- Up to date meter readings
- Receipts of payments (utilities, mortgage and taxes)
- Bill of sale for additional personal items included in contract