| Frequently Asked Questions |
|
| What is a title? |
| A title is the foundation of property ownership. It is the
owner's right to possess and use and transfer the property. |
| Why is transferring title to real estate differ from transferring
to title to personal property, such as a car? |
| Real estate is permanent and can have many owners over the
years, as well as rights to use the property. In order to transfer
clear title to real property, it is first necessary to determine
the rights outstanding on the property. |
| What is a title search? |
| A title search is a detailed examination of the historical
records concerning a property. These records include deeds, mortgages,
court records, property and name indexes, taxes and many other
documents. The purpose of the search is to verify the property
owner's right to sell or finance the property and to discover
any claims or defects to the property. |
| What kind of problems can a title search reveal? |
| A title search can reveal several types of defects in title,
liens, encumbrances and restrictions. Among these are unpaid
taxes, easements, unsatisfied mortgages, judgments against the
property owner and restrictions of use or transfer. |
| What is title insurance? |
| Title insurance is a policy of protection against loss if any
of the problems listed above result in a claim against your ownership. |
| How does title insurance protect my investment if a claim
should arise? |
| If a claim is made against your property, title insurance,
in accordance with the policy, will assure your legal defense,
including paying court costs and related fees. If the claim proves
valid, you will be reimbursed for your actual loss up to the
face amount of the policy. |
| What are the different types of title policies? |
| There are two types of title policies- a lender's policy and
an owner's policy. The lender's policy protect the lender's interest
in the property as security for the outstanding balance under
the buyer's mortgage. The owner's policy protects the buyer's
investment in the property up to the face amount of the policy. |
| What is a HUD Settlement Statement (HUD-1)? |
| This is a summary of the financial portion of the real estate
transaction. The HUD will list the purchase price, loan amount,
closing costs for both buyer and seller and show all pro-rations
and sums to be disbursed by the title company to all parties. |
| What is pro-ration of property taxes? |
| his is the process of charging either the buyer or seller for
their share of real estate taxes owed on the property for their
respective time of ownership. Taxes are said to be "pro-rated
back or forward to the due date of the property taxes. |
| What is pre-paid interest? |
| This is interest due from the date of a loan closing to the
first day of the following month. Most loans require payments
to be due on the first day of the month. Each monthly payment
reflects the principle and interest due on the loan for the previous
month. A loan closing on the 20th day of the month will require
interest adjustment through the 1st day of the following month.
The first payment will then be due on the 1st day of the month
following. Interest adjustment is considered a settlement charge
and will be disclosed on the HUD. |
