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Securing Title Services
Free and clear title to your new home
A title search may take the form of an abstract, a compilation of pertinent legal documents which provides a condensed history of the property ownership and related matters. In many areas title searches are performed by extracting information from the public record without assembling abstracts. In either situation, an expert examination is necessary to determine the status of title and this is normally made by attorneys or title company employees. In areas where both title insurance companies and attorneys perform these and other settlement services, compare fees for services (such as title certification, document preparation, notary fee, closing fee, etc.), provided by each to determine the better source for these services.
In many jurisdictions a few days or weeks prior to settlement the title insurance company will issue a binder (sometimes called a Commitment to Insure) or preliminary report, a summary of findings based on the search of abstract. It is usually sent to the lender for use until the title insurance policy is issued after the settlement. The binder lists all the defects in and liens against the title identified by the search. You should arrange to have a copy sent to you (or to an attorney who represents you) so that you can raise an objection if there are matters affecting the title which you did not agree to accept when you signed the contract of sale.
Title insurance is often required to protect the lender against loss if a flaw in title is not found by the title search made when the home was purchased. You may also get an owner?s title policy to protect yourself. In some States, attorneys provide bar-related title insurance as part of their service in examining title and providing a title opinion. In these States the attorney?s fee may include the title insurance premium, although the total title-related charges in the transaction should be taken into account in determining whether you will realize any savings.
A title insurance policy issued only to the lender does not protect you. Similarly, the policy issued to a prior owner, such as the person from whom you are buying the home, does not protect you. If you want to protect yourself from loss because of a mistake made by the title searcher, or because of a legal defect of a type which does not appear on the public records, you will need an owner?s policy. Such a mistake rarely occurs but, when it does, it can be financially devastating to the uninsured. If you buy an owner?s policy it is usually much less expensive if purchased simultaneously with a lender?s policy.
To reduce title insurance costs, be sure to compare rates among various title insurance companies, and ask what services and limitations on coverage are provided by each policy so that you can decide whether a higher rate is consistent with your needs.
Depending upon practice in your jurisdiction, there may be no need for full historical title search each time title to a home is transferred. If you are buying a new home or a home which has changed hands within the last several years, call the title company that issued the previous title insurance policy and ask about "reissue rate", which would be a lower charge than for a new policy. If the title insurance policy of the previous owner is available, take it to the title insurer or lawyer whom you have selected to do your search.
To mark the boundaries of the property as set out in the title, lenders may require a survey. You may be able to avoid the cost of a repetitive complete survey of the property if you can locate the surveyor, who previously surveyed the property, and request an update. However, the requirements of investors who buy loans originated by your lender may limit the lender?s discretion to negotiate this point. Check with the lender or title company on this. For more information please contact Prime Lend America Mortgage Corporation - Call Toll-Free: 1-877-US-PRIME
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