When you purchase a new home, you and your mortgage lender will want to make sure the property is indeed yours and that no one else has any lien, claim or encumbrance on your property. Title insurance protects your interests and the interests of the lender, should a claim be made against your ownership rights in the property. These claims can be from a former lender who held a mortgage on the property, an unknown owner such as a missing heir, or a contractor who previously did work on the property but was not paid.
Escrow refers to money held by an independent third party during the course of a transaction. In the case of a real estate transaction, the escrow agent or escrow holder has a depository account to deposit the monies for the deal, including your down payment on the property, the funds you provide to cover the closing costs, and your lender’s disbursement of the mortgage monies. These monies are held in the account while the transaction is being finalized. From that account, the escrow agent eventually disburses the money to all parties to the deal.
With negotiations finalized, mortgage loan secured, and insurance services selected, it is now time to sign all the paperwork to close the deal on your new home. Your escrow agent or title officer will receive instructions from your lender, concerning all paperwork needed to consummate the deal. The closing agent and lender together will then prepare a Closing Disclosure, which is a statement that details your actual closing costs, for your review prior to the closing. On the day of the closing, your escrow or closing agent will sit with you to explain each of the documents you must sign.
How Title Insurance Works
Explore the basics of title insurance and how the search and curative work protects your homeownership rights.
Learn the difference between the various title insurance policies available to homebuyers. .
This tri-fold brochure lists more than 50 types of claims that can be made against a property.
Examine specific situations that could cause you to lose title to your home and how title insurance can protect you financially and in the courtroom.
Discover why lenders require title insurance and how the Owner's Policy offers additional protections for the homeowner's rights.
Learn the basics of title insurance with this informational flyer, addressing many unique aspects of this important coverage.