Frequently Asked Questions
What Is Title Insurance?
Your title insurance policy is an indemnification between you (as owner or lender) and the title insurance underwriter which indemnifies you against losses arising from prior defects in title to the real estate. Unlike auto or hazard insurance where you are protecting yourself against a future, unforeseen event, title insurance eliminates risks and insures losses you may sustain by reason of a defect in the title to the property created by past events.
Why Do I Need Title Insurance?
Your real estate will be one of the most significant investments you make in your lifetime. Title insurance provides you assurance and peace of mind that the property you are buying will be marketable against claims by past owners and by heirs or assigns of past owners. Title insurance also protects you from prior acts that you have no control over such as forged deeds, an error by the county recorder’s office, an unpaid tax payment or an ineffective release of a lien.
What Types of Title Insurance Policies are Available?
Generally, title insurance policies include owner’s, lenders, easement holders and lease holders. Within each one of these categories, there are different types of coverages available. For example, an owner’s “standard policy” (while it is cheaper) will not afford the expanded coverage that an “Eagle Policy” will afford. For a comparison of Owner’s Policy coverage click here. For a comparison of Lender’s Policy coverage click here.
If Title to Insured Land is Challenged, Will First American Defend Me?
Yes! As underwriter of your title insurance, First American Title Insurance Company will defend your title in court at its expense, up to the face amount of the policy subject to the terms and conditions of the particular policy you choose.
Are There Any Renewal Costs for the Insurance, and How Long is the Policy Effective?
There is only one premium for title insurance which will be shown on your settlement statement. The policy will remain in effect for as long as you own the insured property.
What is an “Escrow?”
Escrow usually means the holding of funds by a neutral, third-party (the Escrow Agent) in a bank account for application towards the purchase of the subject property pending the Seller, Purchaser and possibly a Lender meeting their contractual obligations to each other. Escrow may also include the holding of funds by the Escrow Agent post-closing pending certain conditions being satisfied by Seller and/or the Purchaser.
What is a “Closing?”
Closing Process Document
Closing is the process of completing or settling your transaction with your Seller, Purchaser and/or Lender. During the closing, documents such as the deed, mortgage, easement, lease or other required document are signed and, if required, recorded in the county clerk’s office. A final accounting, represented by your “HUD” or settlement statement, is approved by all parties and instructions are then given to the Escrow Agent to disburse the funds pursuant to the agreed to instructions on the settlement statement.
How Long Does Closing Last?
Each closing is unique and will depend on, in part, the conditions required by your lender. It is common for closings to last from 30 minutes to an hour. In those instances where you are waiting on lender funds or final underwriting approval, your closing may take more than an hour. It is important for you to contact your Seller or Purchaser and your lender to make sure all conditions to your contract and loan application have been satisfied.
What Fees are Involved in Closing?
Some of the typical costs include abstracting, government documentary stamps, mortgage tax and recording fees, settlement fees, title insurance premiums, property taxes, homeowner association dues, loan charges and survey fees. To request an estimate of closing costs for your particular transaction, please Contact Us today.
What Happens After the Closing?
After the parties have signed all documents and escrow has been disbursed, the title company will follow through with making appropriate deliveries to the parties and the lender, and record those documents required to be recorded in the county clerk’s office. Unless otherwise instructed, the title company will deliver the original, recorded deed to the Purchaser and the recorded mortgage to the lender.