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Frequently Asked Questions |
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Why do you need title insurance?
To protect possibly the most important investment you'll ever make - the investment in real estate.
A lender goes to great lengths to minimize the risk of lending money for the purchase of real estate. First, credit is checked as an indication of the borrower's ability to repay the loan.
Then, the lender seeks assurance that the quality of the title to the property to be acquired and which will be pledged as security for the loan is satisfactory. The lender does this by obtaining a loan policy of title insurance.
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Why is a title search required even though we have owned our home a short time?
Liens, Judgments, or changes in ownership can affect your property title at any time - even minutes after the deed has been recorded in the Court House. Sometimes, the property owner is unaware that title is no longer clear. Common examples: Judgments from lawsuits, Division of Motor Vehicles penalties, Internal Revenue Service Liens, and Court Orders in divorce proceedings. An updated Title Search, issued by the title company is reliable and conclusive. Title Insurance is required in conjunction with the Title Search, to insure against errors, and hidden title defects, such as forged documents, and documents signed by someone who was mentally incompetent.
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Why is a new title insurance policy required for refinancing my home?
A Title Insurance Policy insures one specific transaction. When that transaction ends (for example, when your existing mortgage is paid in full) the title insurance for that mortgage also ends. Your new mortgage lender will require a policy of Title Insurance, insuring that the lien of its new mortgage will be the "first lien" on your property, and that the folks who are signing the mortgage, at the time of closing, are ALL of the owners who have any interest in the property. If you are purchasing the property (not just refinancing it), you will want an Owner's policy issued to you, by the title company at the same time, to insure that you really own the property, and that you have "clear title."
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