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Everyone knows the homebuying team includes a buyer, a seller, a realtor, and a mortgage lender. But there’s one more crucial member: the title company. In this post, we break down what title companies do, why title insurance is important, and how to choose a title company you can trust!
Title companies investigate a property’s title for discrepancies or undiscovered liens — legal claims of a creditor on a borrower’s property used as security for a debt. Sellers who have not paid off their mortgage will have a lien on their title.
Once the title is deemed clear, the title company issues title insurance to the lender. Every home will have a house title that details past property ownership, a physical description of the property, and liens on the property. The title company you choose to work with must be a neutral third party that you trust to research and insure the home you’re buying.
Title insurance isn’t required, but it is highly recommended, as it provides legal protection. In the event you are brought to court over ownership of your property, title insurance will protect you at no cost. If the claim against you is valid, the title insurer will protect you and allow you to maintain ownership of the home or mortgage.
Without title insurance, things can get quite messy. An extreme example is a seller trying to sell a home that they don’t own. More common examples include two family members who purchased a house ten years ago but haven’t spoken since, or a divorcee trying to sell a home without realizing their ex must sign off on the sale. In these situations when the seller needs a co-owner’s permission to sell, a title company helps navigate the complicated process.
Don’t let your title company search add to an already stressful homebuying process. We recommend that our clients choose a title company that excels at customer service and pays meticulous attention to detail. Our loan officers will be happy to recommend a well-vetted title company for you to work with.
If you have more questions about selecting the right title company, reach out to our team today!
*This material has not been reviewed, approved or issued by HUD, FHA or any government agency. The company is not affiliated with or acting on behalf of or at the direction of HUD/FHA or any other government agency.
This information is provided for convenience only, and Family First Funding LLC and its affiliates (“FFF”) make no warranties concerning the accuracy or completeness of any of the information. Information is subject to change without notice, and FFF is under no obligation to provide updated information. This is not financial, tax, compliance or legal advice and should not be taken or relied upon as such. Each individual should consult with his/her financial, tax, compliance or legal professional. Mention of product, process or service shall not be construed as an endorsement or recommendation by FFF.