What is title insurance?
Title insurance is insurance against defects in title to real property. It protects against defects or losses that may be uncovered at a future time after closing whereas someone else can claim ownership of your property. It may list the property owner or the lender as the insured party.

What types of insurance are issued on residential properties?

Two types of Policies are typically issued on residential properties: Lender’s/Loan Policy and Owner's Policy.

A Lender’s Policy covers the lender for the life of the loan. If a new loan number is issued and the current mortgage is paid off, then a new Policy is required. The Lender’s Policy is usually based on the dollar amount of your loan and protects the lender's interests in the property should a problem with the title arise. The policy amount decreases each year and eventually disappears as the loan is paid off.

Any time a new loan is obtained and the current loan is paid off, a new Lender’s Policy will be issued.

An Owner's Policy protects your interest in the property for as long as you own the property. It protects you against the acts of previous owners, mortgages, judgments, etc. filed of public record. Owner's title insurance is usually issued in the amount of the real estate purchase. It is purchased for a one-time fee at closing and lasts as long as you or your heirs have an interest in the property. This may even be after the insured has sold the property. Only Owner's title insurance fully protects the buyer should a problem arise with the title that was not uncovered during the title search.

Neither policies are transferable to a new owner or a new lender with a new loan. However, a mortgage policy can be assigned to another lender if the mortgage is sold or assigned on the secondary market. (Note: the loan number would be the same, only the "owner" of the mortgage has changed.)

What is an endorsement to a title insurance policy?
An endorsement is used to amend coverage provided in a policy. An endorsement can either extend additional coverage to the insured or limit certain coverage provided in the policy. Most endorsements extend coverage, and many require the payment of a fee which is not part of the premium.

Why is title insurance necessary when refinancing?

The policy purchased on a refinance covers the new lender not the homeowner.

Who Pays For Title Insurance?
Customarily, the seller pays for the title insurance premium that protects the buyer's title to the property. However, the buyer and the seller may negotiate who will bear the cost.

If the buyer is obtaining a loan to purchase the property, the lending institution will usually require a title insurance policy to protect their collateral interest in the property. The buyer is responsible to pay for the lender's title policy as one of the costs of borrowing the money, unless the seller has agreed to pay that portion of the buyer's closing costs.

What is a HUD 1 Form?

The HUD-1 Settlement Statement is the financial picture of the closing. All money flowing into and out of settlement appears on the form. It lists the lender’s charges, the title company’s fees, and the governmental recording fees. The "HUD-1" is also known as the settlement statement.

What is an Abstract of Title?

 A condensed history or summary of all transactions affecting a particular tract of land.

What is a Deed?

A written document by which the ownership of land is transferred from one person to another.

What is Earnest Money - Advance payment of part of the purchase price to bind a contract for property.

Who is the Grantee?

A person who acquires an interest in land by deed, grant or other written instrument.

Who is the Grantor?

A person who, by a written instrument, transfers to another interest in land.

What is a Note?

A written promise to pay a certain amount of money, at a certain time, or in a certain number of installments. It usually provides for payment of interest and its payment is at times secured by a mortgage.

What is a Title?

The evidence or right a person has to the ownership and possession of land

What is a Title Search?

An examination of public records and court decisions to disclose the current facts regarding ownership of real estate.

What is Title Commitment - A report issued by a title insurance company committing the title insurance company to issue the form of policy designated in the commitment or binder upon compliance with and satisfaction of requirements set forth in the commitment or binder.