Title examination and Title Insurance

1. Title examination and Title Insurance There are many requirements you must meet when you buy a home. You have to qualify for the loan financially as well as meet state and local postulates. Aside from the fact that you must be able to pay your taxes and possess homeowner’s insurance, you must have title insurance. This is not the same as a title examination done by a Title examination agency. It is not enough to say there is clear title – the title company must render insurance in order to protect the lender and possibly you from future issues. Title examination is a close examination of all public records that affect the title to the real estate you are buying. The search is related to reviewing past deeds, wills, and trusts to ensure the title has passed correctly to each new owner. The examiner tries to validate that all prior mortgages, judgments, and other liens have been paid full-fledged. Defective title refers to a title to real property which is not valid because a claimed prior holder of the title did not have title, or there is an incorrect description of the property, or some other "cloud" over it, which may or may not be learned from interpretation of the deed. To avoid a defective title issue, a purchaser will often research the entire chain of title. Chain of title refers to the history of passing of title ownership to real property from the present owner back to the authentic owner. A record of title documents may be kept up by a registry office or civil law notary. Chains of title engage notations of deeds, judgments of distribution from estates, certificates of death of a joint tenant, foreclosures, judgments of quiet title, and other noted transfers of title to real property. Before buying in property, the purchaser will usually hire a title companies or abstractors to look out for the chain of title and provide a report so that a purchaser will be assured the title is clear of any claims. In many real estate transactions, insurance agencies issue title insurance based upon the chain of title to the property when it is transferred. There exists title insurance for the lender, which is asked to purchase the home. There is also a requirement of an owner’s policy, which you can take out which shields you from any errors from coming up in the future. Lenders demand for title insurance from a Title examination agency in order to protect them from error. This is not a common happening, but sometimes there is an issue where a lien or fault with ownership goes disregarded. If this individual were to come forward down the road, you could lose your ownership rights and the bank would lose its investment in the place. The lender forbids this with a lender’s policy. It even defends against human error. Your title insurance premium counts on the amount of the loan. The amount differs by area, but in usual, you can anticipate to pay 0.5% of the loan amount.