Buying a house is an extremely exciting time in your life. Not only are you making an investment toward your future; you’re also creating a home for you and your family.
But as you’ve probably already gathered by now, the home buying process can also be stressful. So many papers to sign. Inspections. Appraisals. Offers and counteroffers.
And what about the title? Who handles the title? What’s title insurance? And do you actually need it?
Here are answers to some of the most common questions buyers ask us during the home-buying process.
Where does a title company fit in the home-buying process?
In simplest terms, here’s what the home-buying process looks like:
- You, the buyer, wants to make an offer on a property.
- You complete a purchase agreement / sales contract.
- You and your agent (or the seller, in some cases) contacts a title company to schedule a closing.
- That title company conducts research to ensure the title is clean, and does all the legwork leading up to the closing.
- You, the seller, and agents meet with the title company to officially transfer the property title.
As you can see, title companies play a pivotal role in the home-buying process. That’s why you want to make sure you and your agent work with a company that has a proven track record for success.
When, exactly, does a title company start working on my behalf?
Great question. An escrow or sales contract kicks off the process by opening a title order that we then process. All relevant tax information, loan payoffs, surveys, inspections, as well as other legal papers are ordered and reviewed.
What’s involved during a title search?
A title search is an integral part of your home-buying process. During a title search, we search through public records (deeds, mortgages, liens, wills, etc.) and any documents that affect the property’s title. We verify the legal owner of the home and determine any and all debts owed against the property.
Do I need title insurance in Louisiana?
Nearly 100% of the time, your lender will require you to have title insurance. That’s because this coverage gives your lender the ability to sell the mortgage to its investors, which in turn allows them to keep more money to use toward other loans.
Where should I purchase title insurance?
Here in Louisiana, you can purchase title insurance from a title insurance company, or from an agent licensed to sell title insurance. Just make sure you find a company or agent legally able to sell title insurance in Louisiana.
It’s important to note you aren’t required to choose any one specific title insurance company or closing agent. Louisiana grants you the right to shop and choose for your preferred title insurance provider.
When shopping around for title insurance, make sure to ask companies what services and fees are included in the title premium, as well as what fees they separately charge for each of their services.
Is there more than one kind of title insurance policy?
Yes. There are 2 specific types of title insurance policies: owner’s and lenders.
This type of title insurance protects you from the full price of your home, plus legal costs if any issues arise after you buy your home.
The policy is based on the cost of your home, and will cover you as long as you own a vested interest in the property.
Note: You are not required to purchase an owner’s policy.
If you borrow money to buy your home, you’ll likely need to purchase a lender’s policy. This type of insurance protects the lender if a title or ownership problem comes up after the property is purchased.
A lender’s policy is issued for the amount of the mortgage, and coverage decreases as you pay down your loan. Once the mortgage is paid off, the lender’s policy ends.
Still have more questions about the title of your property or title insurance? Call our team today and we’ll walk you through each step. With Clean Title, you’re never alone during this exciting, albeit stressful, time of buying a home.