What Is Title Insurance?
Title insurance is protection against loss arising from problems connected to the title to your property.
Before you purchased your home, it may have gone through several ownership changes, and the land on which it stands went through many more. There may be a weak link at any point in that chain that could emerge to cause trouble. For example, someone along the way may have forged a signature in transferring title. Or there may be unpaid real estate taxes or other liens. Title insurance covers the insured party for any claims and legal fees that arise out of such problems.
Is Purchasing Title Insurance Obligatory?
It is if you need a mortgage, because all mortgage lenders require such protection for an amount equal to the loan. It lasts until the loan is repaid. As with mortgage insurance, it protects the lender but you pay the premium, which is a single-payment made upfront. When you are buying a home, title insurance premium amount is based on the higher exposure of the purchase price or the mortgage amount. In most cases, but not always, it would be the purchase price.
Does Title Insurance Do Anything For Me?
The required insurance protects the lender up to the amount of the mortgage, but it doesn’t protect your equity in the property. For that you need an owner’s title policy for the full value of the home. In many areas, sellers pay for owner policies as part of their obligation to deliver good title to the buyer. In other areas, borrowers must buy it as an add-on to the lender policy. It is advisable to do this because the additional cost above the cost of the lender policy is relatively small.
When Does Title Insurance Protection Begin and End?
With the exception noted later, title insurance only protects against losses from claims that arose prior to the date of the policy. Coverage ends on the day the policy is issued and extends backward in time for an indefinite period. This is in marked contrast to property or life insurance, which protect against losses resulting from events that occur after the policy is issued, for a specified period into the future.
For How Long Is the Property Owner Purchasing Title Insurance Covered?
Indefinitely. The owner’s protection lasts as long as the owner or any heirs have an interest in or any obligation with regard to the property. When they sell, however, the lender will require the purchaser to obtain a new policy. That protects the lender against any liens or other claims against the property that may have arisen since the date of the previous policy.
For example, if the contractor you failed to pay for remodeling your kitchen places a lien on your home, you are not protected by your title policy; the lien was placed after the date of the policy. You will probably be required to get the lien removed before you can sell the property. But in the event the lien hasn’t been removed and a search has failed to uncover it, the new lender will be protected by a new policy.
Do You Need Title Insurance?
I spoke to James T. Kirk, President of Kingsbridge Title Agency in Westwood, New Jersey. Mr. Kirk said Title Insurance is required when you make any kind of Real Estate purchase if it is lender financed. Kingsbridge Title Agency handles industrial, commercial and residential title insurance matters. James said “Whatever the assignment, you can rely on us for quality service, combining the latest in technology, superior vendors and highly competent personnel. Our experience and insight into the entire real estate and title process are always focused on you and your lender’s requirements. “
Jim’s company doesn’t only do Title Insurance. If you are refinancing your home, Jim can close the transaction for you as well. To make it more convenient, Jim usually travels to clients homes in order to have the loan documents signed and notarized. Jim stated “I found that the husband and wife usually work, and many times children are involved or about to be picked for an activity. People are busy, I understand that. Many people say, what a lifesaver you are coming to the house, last time we had to take a half day off from work and drive to Jersey City and wait for an attorney to do the closing.” How many Title Agencies will do that for their clients? Jim has provided Title and Title Insurance as well as closings for many clients of mine. If I needed title quickly, he always came through and went above and beyond to get the job done. I strongly recommend, Jim Kirk and Kingsbridge Title Agency. Kingsbridge Title Agency is located on 15 Charles Street, Westwood, NJ, just off Old Hook Road near Pascack Valley Hospital.. Their phone number is 201-383-0660.
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