FAQs
Frequently Asked Questions About the Title Process
Frequently asked title questions
A title represents your legal ownership of a property. It gives you the right to use, occupy, and transfer the property to others.
Real estate involves long-term ownership, multiple potential stakeholders, and complex rights of use. Transferring real property requires a clear understanding and resolution of all existing claims or interests tied to it.
A title search is a thorough review of a property’s public records, including deeds, tax history, court filings, mortgages, and other legal documents. The goal is to confirm the seller’s legal right to the property and uncover any potential issues that could affect the sale.
Title searches may reveal unpaid taxes, legal judgments, liens, boundary disputes, easements, or conditions that could limit or restrict your rights to the property.
Title insurance protects you financially if a problem arises with your property’s title after closing. It helps cover legal defense costs and potential financial losses resulting from covered claims.
Your title insurance provider will step in to defend your ownership in accordance with your policy. If the claim is valid, they’ll compensate you for losses up to your policy’s coverage limit.
There are two main types:
- Owner’s Policy: Covers the buyer’s investment in the home, up to the full policy amount.
- Lender’s Policy: Protects the mortgage lender’s interest in the property.
This document outlines the financial details of the closing, including the sale price, mortgage amount, closing fees, prorations, and how funds are distributed between the buyer, seller, and third parties.
Proration splits the annual property taxes between the buyer and seller based on how long each party owns the home during the tax period. Taxes are adjusted to ensure each pays their fair share.
Prepaid interest covers the cost of borrowing from the date of closing until your first official mortgage payment. Since most loans begin on the first of the month, any days before then are calculated and paid at closing.
