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What Do You Need to Know About Title Insurance

Back in the early days, a conveyancer acted as a mediator between property sellers and buyers. Their job was to find a property that has no ownership rights other than the seller. So, any person can take the property to pay a debt. However, there was no guarantee or insurance involved if things turned upside down. 

Of late, the title company MD works in the same way as a conveyancer. The only difference being that these companies have now provided title insurance.  So, if things go wrong you will be protected.

What is a Title?

A title or a house title is a record of property ownership. It should not be confused with a deed that acts as a closing document between two parties. 

Instead, a title depicts the history of a property. Title insurance companies create a document that includes owners of the property in the past, physical description of the property, and liens on the property. So, if you are planning to buy a property, your mortgage will be shown as a lien on the title. 

What is a Real Estate Title Company and What Does it Do? 

You can think of a title company as a third party that works on behalf of both the lender and the buyer. This company is approached to get research done on a home that you are buying and get it insured.

Now, let’s consider that you buy a home without a title company. After a few years, you come to know that the seller inherited the property from someone who died and only owns a part of the property. The other half belongs to someone else who shows up on your door for his 50%. 

Had you hired a title company, their thorough research would have revealed the second owner and stopped its sale before you ended up on a mortgage. 

Title Insurance

Title companies usually provide two types of title insurance policies; one for you and the buyer, and then another one for your lender. As your lender is also financially involved in the property, title insurance protects his interests the same way it does you. 

Mostly, the seller of the home pays for the title insurance policy and you pay for the lender’s policy. However, unlike other insurance policies that require you to pay a monthly premium, you only need to pay title insurance once when you close a property deal. Once it is closed, you are covered for the rest of your life or until you own the home. 

Who Holds the Title?

You must work with your title company closely and ensure every wording on your title accurately. Beware of the title phrasing as it can greatly affect your property taxes and fees if you sell your home in the future.

If you are unmarried, the document will be easy as you will be the sole owner of the property. However, if you are married or live in a community property state, the documentation gets a little difficult. In this matter, a title company can guide you on what your title should say.

Closing

The final deal of your home is managed by a title company. The company appoints a signing agent or a real estate attorney to review the closing documents and conclude the deed with a title transfer. 

Funding

Title companies manage money in an escrow. An escrow account is similar to a savings account but managed by a third party. These accounts are common in real estate transactions as mortgage lenders want to be sure of expenses.

All parties involved in the home buying, selling, or mortgage will need to transfer or receive funds related to the transaction. Hence, watch out with your title company in matters of funding to find the safest method. 

How to Choose a Title Company?

Aside from buying and selling a property, choosing a title company is also important. Before concluding on any company make sure to research well,

  • How long has the company been in business? 
  • How many employees do they have? 
  • Do they offer all the services you need to keep the process smooth, from title insurance to closing? 

Conclusion

Your house title is a document that shows who has owned the property in the past along with the description of the property and its liens. A title company is like a third party hired to research and ensure the title of the home you are buying. 

To make an informed decision, we always recommend you to connect with the best title company MD. With their extensive experience in the domain, they work closely with clients like you to close the best deal possible. Well trained and experienced staff from these companies will help you while buying or selling a home and prevent any unwanted hassle. Stay tuned with us for more such updates!  for more blogs

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