Hillsboro Title Company
Below are some answers to help address your initial questions.
A title is the legal right that a person has to the ownership and possession of land.
Title insurance assures the lender and buyer that the person selling a property actually has a clear title to transfer to the buyer. Title companies, like Hillsboro, make sure that the title to a piece of real estate is legitimate and then issues title insurance for that property. This insurance protects lenders or owners against claims or legal fees that may arise over disputes regarding the ownership of the property.
When you purchase car insurance, you are purchasing protection against a future event. When you purchase title insurance, you are insuring against losses caused by title problems that have occurred in the past; your title company seeks to eliminate the sources of these losses. As such, the cost of title insurance is not calculated based on the probability of loss (like other types of insurance), but instead, is calculated based on the value of the property.
Yes, there are two types of title insurance: title insurance for owners
and title insurance for lenders
Lenders require you to purchase a lender’s policy. This type of policy only insures that the financial institution has a valid, enforceable lien on the property. It protects the lending institution against losses occurring from defects in titles. Homebuyers are required to pay for the lender’s title insurance when closing on a property.
An owner’s title insurance policy protects the owner from title defects that existed prior to the issue date of your policy. In some cases, it also covers the full cost of any legal defense of your title, for any covered matter. You are not required to purchase an owner’s policy, but the purchase of one can serve to protect your investment and provide peace of mind.
A title search is a full search of public records for a period of not less than 45 years to make sure the person or company claiming to own the property does and to investigate the possibility of outstanding mortgages, liens, judgments or unpaid taxes associated with the property, as well as any restrictions, easements, or other issues that could impact title transfer. A title search may also require a survey of the property in question to determine land boundaries or encroachments. Once an official title is found, a title company issues a title insurance policy which protects the appropriate parties.
The Real Estate Settlement Procedures Act (RESPA) entitles individual homeowners to choose a title insurance company when purchasing or refinancing residential property. In many cases, realtors or attorneys will have a relationship with a specific title company established and can be good sources of referrals. However, it is illegal for these professionals to mandate that a particular title company be used in a real estate transaction.
Title insurance is not calculated based on probability of loss, but instead seeks to eliminate the source of possible losses. Therefore, it is not a recurring cost. Instead, it is a one-time premium directly related to the value of the property being purchased. Paid once when you close on your property, the majority of the premium is used to finance title searches and maintain title plants that aggregate public title records and information.
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