Title insurance is typically a large portion of your closing costs on a mortgage. So what is it? Title insurance is a contractual obligation that protects against losses that occur when title to a property is not free and clear of defects. Typical defects include outstanding liens, lawsuits, flawed public records, fraud, forgery, back taxes, undisclosed easements or conflicting wills. There’s basically two kinds, one is a lender’s policy which will usually be required when obtaining financing and the other is an owner’s policy which is optional. An owner’s policy can be further broken down into the following three types: standard, extended and ALTA Homeowner’s. During the mortage process, a title company will search property records and will conclude by issuing the lender a policy which the borrower must pay for. Therefore, this insurance policy only protects your lender’s interest in the property until your loan is paid in full. I’m Stewart Brown, a licensed Mortgage Loan Originator in Palm Springs, California here to simply topics in Real Estate and Mortgage Lending. Please, like, share, follow and subscribe!
