The title is a crucial element in the home buying process. After all, the title is the official document confirming that you are the legal owner of your new home. So, it’s important to understand the steps and fees involved.
The Role of the Title Company
Let’s say you’ve found a home and made the seller an offer they couldn’t refuse. Here’s where the title company comes in. It is their job to make sure the title to the property is legitimate, and you can be confident that once you buy the property, you will be the rightful owner. To ensure that your ownership claim is valid, the company will do a title search—an in-depth examination of property records to make sure that the person or company claiming to own the property does, in fact, legally own the property and no other party can claim full or partial ownership.
The title company will also look for outstanding mortgages, liens, judgments or unpaid taxes associated with the property, as well as any restrictions, easements, leases or other issues that might impact ownership. They may also require a property survey to determine the boundaries of the land the home sits on, whether the home sits within those boundaries, whether there are any encroachments on the property by neighbors, or any easements that may impact an ownership claim.
Title Service Fees
Title service fees are considered part of the closing costs you pay when getting a mortgage. These include fees for conducting the title search, title settlement, title insurance binder and title insurance. You can and may want to shop around for your title services to negotiate lower rates.
Title insurance is designed to protect the lender in case issues come up with the title to the home you’re buying. The buyer is usually required to purchase the lender’s title insurance. You can also buy title insurance for yourself to protect you in case someone sues you because they believe they have a claim against the home. It’s not uncommon for claims to be raised due to a previous owner’s failure to pay taxes or by contractors stating that they were not paid for work done on the home before you bought it.
Although it is strictly optional, you should consider getting buyer’s title insurance if you’re at all concerned that a title issue could affect your ability to keep the home after you take possession.
Looking for a reputable title services company? USA Mortgage has vast experience working with title companies. And we would be delighted to recommend a trusted title partner with expertise in transactions like yours. As with your USA Mortgage loan officer, you are always welcome to reach out to your title company for answers to your questions on title searches, title abstracts, title insurance, escrow accounts, or closings.