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What Is Title Insurance?
Getting title insurance is a great way for new homeowners to protect the investment they have placed in the property they are purchasing, including their down payment. This will prevent property loss or damages the owner might experience due to defects or errors in the title.
Title insurance serves to protect you against loss both now and in the future if the title of your property is found to have imperfections or omissions in title, or defects in the title. Without title insurance, your ownership of the property could be endangered by errors that occurred years or even decades before you bought it.
What Are the Steps of the Title Process?
In order to get title insurance, you must go through the following steps:
Open an order for the title insurance with a title officer, who will typically respond within 24 to 48 hours. A preliminary report will then show the record title in its current state and will serve as an offer to provide insurance.
Your title officer will perform three searches: Property, Name, and Tax Searches. This will allow them to create the preliminary report.
Your legal representation will perform an analysis of the documents of record in order to discover whether any of the information present would prevent the buyer from using the property for its intended purposes and whether antiquated leases can be eliminated from the policy.
A site inspection will be ordered to prepare for American Land Title Association® or ALTA coverage. Based on the inspection report, the initial title product will be used to show any issues that would impact the title.
The title insurer will insure up to the total sale price or loan amount and a title insurance company will be selected.
The Value of Title Insurance
Title insurance protects the lender and covers up to the value of the mortgage if a defect is found. Through an owner’s title insurance policy, the title insurance company pays outstanding balances and the equity up to the total purchase price.
What Can Affect My Title?
The most common claims filed against a title that property owners find themselves dealing with are:
Title insurance is slightly different than traditional types of insurance in the sense that it offers protection against past occurrences that could result in a claim at a future date. Your coverage will last as long as you have an interest in the property at hand and can continue to any future heirs of the land.
What Is Needed to Complete the Process?
After the contracts have been signed by both the buyer and the seller and submitted to the title company, the title company will issue a receipt and copy of the contract to each party.
Typically, this will include:
A cover letter with the name of the closing agent
Their contact information
A “for guaranty file” number, or GF
The GF number is used to identify the file when communicating with the closer. An “opening title” refers to the process of setting up a working file for the transaction. This is the first step in the process of issuing a policy.
You might be asked for the following information at this step in the process:
A survey (if applicable)
Any objections of the title commitment document once issued
Any objections to the closing documents once issued
Any objections of the settlement statement, which will be used to make sure you get the credits you are entitled to, once issued
If applicable, the request for release of earnest money to the other party
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The team at Elite Title Solutions, LLC can help you protect your greatest asset by assisting you through every step of the title insurance and closing process with dependable, personable guidance. Don't settle for a company that will outsource or leave your business on the back burner until someone can "get around" to helping you. Start moving forward today with a free, no-obligation consultation from Elite Title Solutions in Hammond.