| WHY
DO I NEED TITLE INSURANCE?
Title insurance is an insurance policy or
contract issued by a title company it protects you, the purchaser
or owner, against a loss that may arise by reason of a defect
in your ownership or an interest you have in real property.
In addition, the title insurance company agrees to defend
you in court if there is an attack on your title. It will
cover attorney and court expenses or pay a loss caused by
a defect in title up to the face amount of the policy subject
to the terms listed in your policy.
Other Frequently
Asked Questions
HOW DOES TITLE
INSURANCE DIFFER FROM OTHER TYES OF INSURANCE?
Title Insurance is different from other types
of insurance in that it protects you, the insured, from loss
that may occur from matters or defects from the past. Other
types of insurance such as auto insurance, life insurance
or health insurance, cover you against losses that ma occur
in the future. Title insurance does not protect against a
defect that may originate at a later date.
TITLE INSURANCE PROTECTS you and your lender
if someone challenges your property title because of defects
unknown at the time you bought the policy. Possible title
defects include:
· Errors in deeds
· Forgery
· Undisclosed heirs
· Missing heirs
· Liens for unpaid taxes
· Gaps in chain of title, and
· Mistakes made in examining records
Before issuing a commitment for title insurance,
Guaranty Title Company of Boerne will check for defects in
your chain of title by examining public records, including
deeds, mortgages, wills, divorce decrees, court judgments,
tax records, liens encumbrances and plat records. The title
search determines who owns the property, what debts are owed
against it and the conditions of the title.
GUARANTY TITLE CO OF BOERNE also handles
the property closing and holds the earnest money in a trust
account until the purchase is complete. back
to top
WHO DOES TITLE INSURANCE PROTECT?
Most lending institutions will not
loan money for a home or other property unless you provide
a “mortgagee” title policy. This policy protects
the lender’s investment by paying the mortgage if a
title defect voids owner’s/buyer’s title. The
new loan is often sold to an investor who requires the “mortgagee”
title policy. When you buy a house, title companies also issue
an owner’s policy, unless you reject it in writing.
back to top
HOW LONG SHOULD YOU KEEP YOUR POLICY?
The owner’s policy remains in effect
as long as you or your heirs own the property or are liable
for any title warranties made when the property is sold to
your subsequent buyer. You should keep your policy, even if
you transfer the title. Your owner’s title policy cannot
be transferred to a new owner. If the new owner wants an owner’s
title policy, there must be a new policy issued.
back to top
IS MY POLICY
STILL GOOD IF I REFINANCE MY HOME?
Most lenders require borrowers to buy
new mortgagee title policies when refinancing. When the new
loan pays off the existing loan, the old Mortgagee title policy
is no longer in effect. A new policy is issued in connection
with the new loan. Title Companies must discount the premium
if refinancing occurs within seven years of the original loan
date. back
to top
|
