It’s insurance against undisclosed problems with the title, and it protects you against financial loss due to title defects, liens or other matters of public record. Title insurance will defend you against a lawsuit attacking your title, or reimburse you for the actual money lost.
Before a policy is issued, a title insurance company conducts in-depth research to detect, prevent, and eliminate risks and losses caused by title problems. They do this by searching public records.
For a one-time premium, your owner's title insurance policy will remain in effect for as long as you own the property.
Your mortgage lender will also require a title insurance policy. The lender's policy protects the lender against any title problems that may affect repayment of the loan. The owner’s policy and the lender’s policy are two different policies, and the one-time premiums for both are usually paid by the home buyer. In a few states, the home seller pays for the owner’s policy.

2. Why do you need title insurance?

A home is often the largest single investment any of us ever make. Title insurance protects against loss of value from defects that may exist in the title, or arguments made by others that such defects exist. These defects or problems include fraud, forged signatures on deeds, unknown heirs or previous owners, liens and documentation errors. If you were uninsured and your right to the title is challenged, you could lose significant money defending yourself – you could even lose your home.

3. How does title insurance protect you?

An owner's policy of title insurance protects a buyer against defects in the title of the property, either clearing up title problems or paying for your losses. For a one-time premium generally paid at closing, an owner's title insurance policy remains in effect as long as you, or your heirs, retain an interest in the property.

4. How does title insurance protect the lender?

A lender's policy of title insurance protects the lender that financed a piece of real estate against loss caused by defects in the owner’s title.

5. Why do I need title insurance on a refinance?

Title insurance on a refinanced mortgage is usually offered at a reduced rate, and it assures your lender that you actually own the property. It insures that no one else has a preemptive position in front of the lender, and if someone does, it pays the lender’s losses.

6. Why do I need title insurance on a brand new house?

Even if your home itself hasn’t had previous owners, the land that it stands on has. Your policy insures you as the owner of a specific piece of property. It clarifies the property rights and insures that your builder hasn’t used it as collateral on another loan, that there are no unidentified easements affecting your property and that no problems will surface to hurt you later.

7. How often do I pay title insurance?

Title insurance is a one time cost. You don’t pay monthly or annual premiums to keep your title insurance – you pay it just one time, typically at closing. Then you’re covered for as long as you own your home.

8. Who chooses the title insurance company?

When it comes to title insurance, you have the right to choose whatever company you’d like. Although many people just rely on their mortgage lender or real estate agent to pick a title insurance company for them, ultimately the decision is yours.

9. What is a closing?

Closing, which is also known as "settlement" or "escrow", is the event where the title to a property is transferred from seller to buyer. Closing is typically held in an office, title agent or title insurance company, and involves the completion of all the necessary paperwork to finalize the agreement between buyer and seller, as well as the collection of all funds required for the transaction.

10. What are closing costs?

Closing costs are all costs required to close the real estate transaction. They can include (but are not limited to) surveying fees, property taxes, title insurance premiums, attorney fees, real estate agent commissions, points, loan origination fees, private mortgage insurance (PMI), and the balance of your down payment

11. What is a HUD-1 ?

A document that provides an itemized listing of the funds to be paid, or that were paid at closing. Items that appear on the statement include real estate commissions, loan fees, points and initial escrow amounts. Each type of expense goes on a specific numbered line on the sheet. The totals at the bottom of the HUD-1 statement define the seller’s net proceeds and the buyer’s net payment at closing. It is called a HUD-1 because the form is printed by the Department of Housing and Urban Development (HUD). The HUD-1 statement is also known as the “closing statement” or “settlement sheet.”

12. Why a 1031 Exchange ?

Financial Leverage
When the tax liability in a transaction is deferred, the taxpayer receives an increase in available capital. This capital can be applied to acquiring the replacement property. The taxpayer gains financial leverage through an exponential increase in cash flow and appreciation – which provides more buying power.
Strategic Flexibility
With a 1031 Exchange, the taxpayer can employ a number of tactics to increase investment flexibility, such as:

• Consolidating many properties into one for ease of management
• Diversifying one into many for ease of future divestment
• Relocating properties geographically to take advantage of trends
• Changing property types (for real estate exchanges only)
• Improving investment performance
• Adapting to changes in needs and abilities, and other life transitions
• Replacing older properties with newer ones

Successful exchanges start with expert answers to your questions. Contact us today to find out more about the benefits of a 1031 Exchange.

13. What if I have other questions?

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