Q. What is a Title?
A. A title is the evidence, of right, that a person has to the ownership and possession of real property. It is possible that someone other than the owner has a legal right to the property. If that right can be established, this person can claim the property outright or make demands on the owner as to its use.
Q. What is Title Insurance?
A. Title insurance insures the purchasers of real estate and mortgages against loss from defective titles, liens, and encumbrances.
Title problems are defects that occur before the date of the policy and remain undisclosed until sometime later. Even the most thorough and accurate search of the public records cannot reveal these “hidden” hazards which could delay the sale of your property, make it unmarketable or even cause you to lose your property.
Title insurance covers defects in the title prior to when you purchased your property.
Q. How much does Title Insurance cost?
A. The one-time premium is directly related to the value of your home. Typically, it is in expensive than and is only a one-time charge and for the amount of mortgage being insured.
Q. What is a Lender’s policy?
A. Your lender knows that title problems can occur more often than you think. Most lenders require title insurance to protect their interests in the property.
You are not insured by the Lender Policy.
Q. How long does Title Insurance coverage last?
A. The Owner Policy is valid for the time your policy was issued until you choose to sell (transfer deed) your property – be that once year or twenty years of ownership.
The Lender Policy is valid through the life of the loan. A Lender’s Policy may be passed to another lender/mortgagee through an assignment of the loan, however, is not assignable should you refinance the property. A new Lender Policy would be issued at that time.
An Owner (or Fee) Policy is non-transferable.
The new owner will be required by his/her lender to purchase a new policy and at that time the new owner may elect to insure the property with a new policy issued in his/her name.
Q. Why do I need an Owner policy if I proved one for the loan?
A. You are not insured by your Lender’s Policy. A one-time premium protects your property from actual loss resulting from any risk covered by your policy, up to the amount of the policy.
Your Fee or Owner Policy may also provide for legal defense costs should a claim arise, unless specifically excluded from your policy. Typically, the Lender and the Owner Policies are issued at the same time to reduce your title policy costs.
An Owner’s Policy may also be issued on a property where no lender is involved as protection for the new owner of the property against possible claims.
Also, a current owner may upgrade the amount of title policy on a property should it increase significantly in value due to improvements (such as building on a vacant lot or an addition to an existing structure).
Q. What are typical charges for title work?
A. Actual costs vary from state to state however, you can expect any of the following:
- One-time premium fee for an Owner or Fee Policy for as long as you own the property
- One-time premium fee for a Lender’s Policy for Life of Loan
- Title Search (comprehensive search of all public records)
- Lender Required Endorsements and Closing Service Protection Letter
- Closing Settlement Agent Fee (NJ Only)
- Non-title Closing Fees
- County Recording Fees to Record New Deed and Mortgage
- Overnight / Express Mailing
- Lender Required Survey
- Legal Representation / Attorney Fees
- Mortgage Tax (NY Only)