The Facts on Title Insurance
What is title insurance? Title insurance protects the home owner and mortgage lender against ownership disputes relating to your property.
Title Insurance is a specific type of insurance, paid in a one-time fee during settlement, which protects you and your lender in the event of a dispute over the property's rightful owner. Think of it as assurance rather than insurance. Title insurance assures the lender (and you the buyer) that if another party comes forward claiming to have rights your property, you are protected. You will not have to pay for litigation to resolve any related dispute about the ownership of the property. Title insurance is mandatory on both real estate purchases secured by a mortgage and mortgage refinances. Only if you pay cash in full for your house would purchasing title insurance be optional.
In both Pennsylvania and New Jersey, title insurance premiums are regulated by the State Department of Insurance.
All title insurance companies who are members of the state rating bureau must apply the state’s approved title insurance rates. Both states offer two rates: one for real estate purchases (sale) and one for refinances (non-sale). Depending on whether you’re purchasing or refinancing, there are different premiums that apply. These differences are also regulated by state law.
In both Pennsylvania and New Jersey the home buyer/borrower can choose their own title company.
The buyer/borrower has the right to source their own title insurance, and select a Title Company of their choice...the decision is not up to the Seller, Realtor or Bank. The buyer’s real estate agent may make a recommendation or offer to obtain the title insurance on their behalf, but the buyer is under no obligation to use their recommended title company or the “in-house” title company.
The title insurance company plays in integral role in your real estate transaction.
Your title insurance company will conduct settlement and insure that all liens and judgments affecting the property to be purchased have been satisfied. They also serve as the liaison for your purchase or refinance, coordinating with your real estate professional, mortgage lender and attorney. These services are included in the premium you pay for title insurance so you shouldn’t expect to see any other administration or service fees.
The title search is typically a swift and efficient process.
Performing a title search on the property to be purchased is the first step in the settlement process, and is rarely cause for delays. Getting a title commitment back usually takes about 3 to 5 business days, which confirms that the seller is the legal owner of the property, and that there are no unsettled liens. In rural areas where official deeds and records may be a little harder to access, it may take an extra day or two. In more populated areas, it’s possible to have the search completed within 24 hours if necessary.
Get a Complete and Accurate Title Insurance Quote, including all fees, using our Title Insurance Calculator.
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