Purchasing a home is one of the largest investments many people make in their lives. It is also one of the most complex transactions. When purchasing a house, it is also important to purchase a title insurance policy. Why? A title insurance policy guarantees full protection for the property owner. Title insurance is purchased from a title insurance company, such as First Title & Escrow, an authorized agency. Title defects can sometimes lead to a financial loss for the property owner or lender. Title insurance policies reimburse people for these losses, including for expenses corresponding to defects in the title. A title insurance policy essentially ensures that no obstacles can impede on the property you rightfully, legally, and wholly own.
First Title & Escrow is a national title insurance agency that prioritizes providing clients with superior title and closing services. Among these services include title insurance policies.
The two most common types of title insurance policies are owner insurance policy and lender insurance policy. Owner insurance policy protects the homeowner from any issues that could be a byproduct after closing a sale. It also protects the buyer from legal fees that could amount from a title dispute after a sale has been made. Once the policy is issued, it insures the owner for as long as the property is owned. This policy is limited to the market value of the property at the time it is purchased so if the value of the property increases, you may need to purchase additional coverage, also known as an “Extended Coverage Policy”.
The lender insurance policy is also referred to as a “loan policy.” This policy is solely for mortgage lenders. It protects them from issues that arise from title defects that occur prior to the policy date. For example, the policy is issued in the amount of the mortgage loan. As the mortgage is paid off, the policy decreases. Between these two policies, the lender’s title insurance policy protects the lender’s interest in the property up to the amount of the loan, and the owner’s title insurance policy protects the property owner’s equity.
Title insurance rates are not constant and vary state to state, even county, as well as by the title insurance company that is writing that policy. So, it is important to ask your title company what different title insurance companies they work with and how those rates vary. American Land Title Association (ALTA) looked at the numbers of title insurance premiums in the United States in 2014 versus 2013. There was a 10.9% drop in title premiums in 2014 from 2013. Interesting to note, the decrease in annual premiums did not result in a comparable decrease in net income. Annual net income actually increased by 8.4% in 2014 in comparison to in 2013. ALTA believes the increase is due to reductions in operating expenses and in loss adjustment expenses. They believe the decline in total premiums is in part due to a slowdown in refinancing as well as a long winter and soft housing demand stemming from a lack of consumer confidence. Of course, not all states experienced losses in premiums, but four of the five largest markets did, including New York, Florida, California and Pennsylvania. Premiums increased in Texas.
About First Title & Escrow
First Title & Escrow is a full service national title company offering a plethora of solutions for the real estate sector. We offer residential and commercial title services. First Title & Escrow works with lenders, brokers, agents and other stakeholders in the real estate process offering the highest standard of customer service in addition to utilizing cutting edge technology to ensure transactions are as secure, smooth, fast and accurate as possible.