Process of Obtaining Title Insurance
You are ready to purchase a home and you need to obtain title insurance. Many lenders will require the buyer to purchase title insurance based on the value or price of the home. Usually, if you can put at least 20% down, title insurance is not required.
Required or not, title insurance will ensure that there are not outstanding liens or encroachments on your property. There are some steps to obtaining title insurance. Here is what you, as a buyer, can expect to occur when buying a house with title insurance.
You, your attorney or your lender will request title insurance. This initial request can be done anonymously and will give you the information currently recorded about the title of the property.
The current record is not always accurate; therefore, a title officer will need to research more information regarding the title. He/She will search for previous owner’s names, property information and tax information.
After all the information has been gathered, a title examiner will evaluate the data and determine what needs to be done to obtain title insurance.
An underwriter will then contact the buyer to let him/her know the cost, liability and limitations of the title insurance policy.
Once everyone agrees to the terms, steps will be taken to make sure the title is free and clear before final closing. This may require the title insurance company to contact previous owners or businesses that may have placed a lien on the property.
At closing, the policy will be delivered to the buyer and the seller. The buyer will pay a one-time fee for obtaining the insurance. Continual premiums will be included in the price of the home.
Once five years have passed or 20 percent of the home is owned, the owner may drop the title insurance. This allows for enough time and money to be invested in the property.