What your clients need to know about title insurance
No one knows more than mortgage and real estate professionals how overwhelming the home buying process can be for some people. And if you’ve been in this field for any length of time, you know that an important part of your job is to educate clients so that they can make sensible decisions that fit their needs. One question that people often ask is: what is title insurance? So it’s a good idea to become very familiar with explaining the key components of it to your clients. Take a look some frequently asked questions for ideas on how to explain some of the basic elements of title insurance to your clients.
1. What is a title search?
A title search includes searching the history of a property; determining the chain of ownership; discovering any liens, easements or agreements that may affect your ownership or usage of your property; and making sure all previous mortgages are discharged or released. Title searches can reveal problems such as unknown liens, survey disputes, and other problems that title professionals fix before the property is purchased.
2. What is the difference between lender’s title insurance and owner’s title insurance?
The difference is in who the insurance policy is protecting. For example, if a woman purchases a home for $200,000 and pays for it with $40,000 in cash and a mortgage of $160,000 from a lender. The lender is going to want to protect its $160,000 investment and the woman is going to want to protect her $40,000 investment (and future equity) should a problem with the title of the property be uncovered later on. Both parties need their own title insurance policy to protect their own interest.
3. Is title insurance required if you have a mortgage?
In most instances lenders require borrowers to obtain title insurance on their property because it protects the lender’s investment (the mortgage) against loss if a problem with the title occurs.
4. Will the lender’s title insurance policy pay for the homeowner’s legal fees if a title problem is discovered?
No, the lender’s title insurance policy will not cover the legal fees of the homeowner. That is one of the reasons why the homeowner needs title insurance.
At Equity National, we are focused on helping our partners create positive buying experiences for their customers. Give us a call at 888.434.5500 to find out how we can help you.
By: Equity National January 22, 2015 Uncategorized