What is a Title?
title is an owner's right(s) to possess and use a property.
What is Title Insurance?
There are two types of title insurance, Lender Title Insurance and Owners
Lenders Title Insurance - this is typically required by the lender in the
form of a Loan Policy, which protects the lender's interest in the property,
should a problem with the title arise. The policy amount decreases
commensurate with the loan.
Owner's Title Insurance is usually issued in the amount of the real estate
purchase. It is purchased at the time of closing for a one-off fee and
lasts for as long as you or your heirs have an interest in the property.
Owner's Title Insurance fully protects the buyer should a problem arise with
the title that was not uncovered during the title search.
What is a
The Title Company will search the public
land records for matters relating to the specific title. That search
may go back as far as 50 years. Title problems such as deeds, wills
and trusts that contain incorrect information, outstanding judgments or tax
liens against the property or easements are identified. The Title Company fixes these
problems and issues the Title Insurance.
Why do I need Title Insurance?
In Pennsylvania, title insurance is not
legally required for purchasing real estate. However, almost all
lenders will require that you purchase a title policy.
How am I
A standard title policy insures the owner
and the lender from any financial loss resulting from the following:
1. title being vested in someone other then the seller
2. any defect in, lien against or encumbrance on the title
3. unmarketability of the title
4. lack of pedestrian access to and from the land
This coverage does not cover the five
standard exclusions, or any specific encumbrances or easements which are
recorded against the property. The five standard exclusions are as follows:
1. Any title claim known to the buyer but not yet recorded as of the date of
2. Any title claim which was self-imposed or created by the buyer
3. Any loss resulting from zoning violations or subsequent zoning changes
4. any subsequent loss resulting from state action (condemnation or eminent
5. Any condition which would have been disclosed by an ALTA as-built survey
Exceptions from coverage will also include
matters which are recorded against the property, including utility
easements, roadways, railroad rights, restrictive covenants and if
applicable homeowner use restrictions. Also excepted from coverage is
environmental contamination of the property and future property tax
does it cost?
In Pennsylvania, title insurance rates are
set by the state. The amount of title insurance is based on the
greater of the purchase price or the loan amount. See our
Rate Calculator to determine how much it will
why do I need new title insurance?
obtain a new loan, the lender will require title insurance. Even if you
recently purchased your home, there are some problems that could arise with
the title. For instance, you might have incurred a mechanics lien from a
contractor who claims he/she has not been paid. Or you could have had a
judgment placed on your house for unpaid taxes. The lender wants to make
sure the title to the property they are financing is clear.
If it has been no more than 10 years since you
obtained the previous policy, ask for a "reissue rate" to receive a
discount. You will not need to purchase new Owner's title insurance when
refinancing. Owner's title insurance is purchased for a one-time fee at
closing and lasts as long as you or your heirs have an interest in the
a newly built home, do I need title insurance?
Construction of a new home raises special
title problems for the lender and owner. You may think you are the first
owner when constructing a home on a purchased lot. However, there were most
likely many prior owners of the unimproved land. A title search will uncover
any existing liens and a survey will determine the boundaries of the
property being purchased. In addition, builders routinely fail to pay
subcontractors and suppliers. This could result in the subcontractor or
supplier placing a lien on your property. Again, lenders want to be sure the
property has clear title, and they are insuring the correct property.
Purchasing owner's title insurance will protect you against these potential
problems and pay for any legal fees involved in defending a claim.