Frequently Asked Questions List
DO I NEED TITLE INSURANCE?
Title insurance is a means of protecting yourself from financial loss in the event that problems develop regarding the rights to ownership of your property. There may be hidden title defects that even the most careful title search will not reveal. In addition to protection from financial loss, title insurance pays the cost of defending against any covered claim.
BUT THE LENDER ALREADY REQUIRES TITLE INSURANCE, WON’T THAT PROTECT ME?
Not necessarily. There are two types of title insurance. A Lender’s Policy insures that your lender has a valid lien on the property. Most lenders require this type of insurance, and typically require the borrower to pay for it. An Owner’s Policy, on the other hand, protects your interest in the property. Title troubles, such as improper estate proceedings or pending legal action, could put your equity at serious risk. If a valid claim is filed, in addition to financial loss up to the face amount of the policy, your owner’s policy covers the cost of legal defense.
What is a title?
A title is the evidence, of right, that a person has to the ownership and possession of land. It is possible that someone other than the owner has a legal right to the property. If that right can be established, this person can claim the property outright or make demands on the owner as to its use.
There can be a number of problems that remain undisclosed even after the most careful search of public records. These hidden “defects” are very dangerous and sometimes are not discover for months or even years after you purchase your home. You could be forced to spend substantial money on a legal defense to protect your rights. The HPT Policy helps protect you against losses and defects and provides legal defense for coverage risks.
The HPT Policy provides the most complete protection against creditor claims, undisclosed heirs, mistakes in recording, or errors in tax records.
What is title insurance in real estate?
When you buy a home, you are given a title to the property, which generally means you receive full legal ownership. Sometimes, there is a hidden mistake in a prior deed, will, mortgage, etc., that may give someone else a valid legal claim against your property!
For new homebuyers, title insurance protects against loss if a covered defect is found in the title to your home. It offers you information on the status of the title to land before you buy or refinance and protects against title claims that may affect the title after you buy. Having title insurance can save you money, time, trouble, even your home!
How Much Does Title Insurance Cost?
The single premium is directly related to the value of your home.
Typically, it is much less expensive than your annual auto insurance. It is a one-time expense, paid when you purchase your home. Yet it continues to provide complete coverage for as long as you or your heirs own the property.
Protect your investment!
What is a Closing Disclosure (CD)?
The Closing Disclosure (CD) is the document prepared by the Lender with the assistance of the title company at closing which shows where all of the money in the transaction is coming from and going to. It gives a 'financial picture' of the closing transaction. At closing, the lender is responsible for preparing the Closing Disclosure in accordance with the contract, market practice and state and federal laws.
Know the facts, understand costs and prepare for the closing day with ALTA's "Home Closing 101" educational initiative.
How am I protected as my property increases in value?
Your HPT Policy will automatically increase by 10% in value each year for the first five years (up to 150%) to help cover increases due to inflation.
When should I look into Title Insurance?
Call Victory Title as soon as you and the seller/buyer sign the purchase contract. With a brief summary of the details, our team of title experts will begin a search of the public records and issue a title commitment. Because there are a number of steps we must take to make certain that we know all we can about the title, it is wise to get the ball rolling as soon as possible.
You have the right to choose, choose Victory Title & Escrow!
What does title insurance protect against? // What can make a title defective?
Any number of problems that remain undisclosed after even the most meticulous search of public records can make a title defective. These hidden “defects” are dangerous indeed because you may not learn of them for many months or years. Yet they could force you to spend substantial sums on a legal defense, and still result in the loss of your property. When you purchase a title insurance policy from Victory Title, we provide complete protection from these and a host of other hidden defects:
- Defective acknowledgements due to improper or expired notary.
- Conveyances by undisclosed divorced spouses
- Rights of divorced parties
- False impersonation of the true owner of the property
- Forged deeds, releases or wills
- Undisclosed or missing heirs
- Instruments executed under invalid or expired power of attorney
- Mistakes in recording legal documents
- Misinterpretations of wills and other probate matters
- Deeds by persons of unsound mind
- Deeds by minors
- Deeds by persons supposedly single, but in fact married
- Liens for unpaid estate, inheritance, income or gift taxes
- False affidavits of death or heirship
- Adverse possession
- Title searcher's mistakes or omissions
- Forfeiture of real property due to criminal acts
- Creditor claims
- Deeds executed under false or expired powers of attorney
- Mistaken interpretation of wills and trusts
- Incorrect representation of martial status
- Undisclosed heirs
- Mistakes in recording legal documents
- Incorrect legal descriptions
- Forged deeds, releases, etc.
- Federal, state inheritance and gift tax liens
- Errors in tax records
- Federal condemnation without notice filing
- Capacity of foreign fiduciaries
- Duress in execution of documents
- Want of jurisdiction over persons in judicial proceedings
- Deeds from minors or non-existent entities
- Discovery of later will after probate of first will
- Easements by prescription not discovered by a survey
- Deeds delivered after death of grantor or grantee, or without consent of grantor.
What protection does title insurance provide against defects and hidden risks?
Title insurance will pay for defending against any lawsuit attacking the title as insured, and will either clear up title problems or pay the insured's losses. For a one-time premium, an owner's title insurance policy remains in effect as long as the insured, or the insured's heirs, retain an interest in the property, or have any obligations under a warranty in any conveyance of it. Owner's title insurance, issued simultaneously with a loan policy, is the best title insurance value a property owner can get.
If the status of title is cleared before you buy, why do you still need title insurance?
Because even after the most careful research, some flaws, such as forgery, fraud or confusion due to similar names, may go undetected. These problems may surface at any time in the future. Protection against future claims is provided by a title insurance policy which is issued after your transaction is complete. Policy terms and conditions determine the extent of coverage provided. This insurance policy insures the condition of title. Separate policies are usually issued to protect the owner's and the lender's interests.
How can I save money on my title insurance policy?
If you purchased or mortgaged your property recently, you may be able to save money on the purchase of your new title insurance policy by asking for a special 'refinance' or 'reissue rate'. Simply provide a copy of your prior title insurance policy to Victory Title prior to closing, or ask your Victory Title Closing Agent for more information.