Why do I need Title Insurance when purchasing property?
When you buy real estate, you want to be certain it’s safely yours.
On the side of innocence, inadvertent errors are made. Assumptions are made that
legal descriptions are correct. Partial lot descriptions are sometimes missed.
Other title defects include a forged deed or will and unreleased liens. There could be a purported title
transfer by someone under age. Should a married person conveying homestead without
the spouse’s joinder, a title defect exists. The same occurs if there is a fraudulent
impersonation. Without title insurance, you are not protected against secret marriages,
undisclosed heirs, invalid divorces, unreleased liens including Federal Tax Liens. There is no protection against
the title defects mentioned unless you have title insurance.
Why is Title Insurance important when refinancing?
A separate policy is required by the lender insuring the validity of your mortgage
when it is executed.
Until you pay off your first mortgage, it is a valid lien against the property. The Mortgagee’s Title Policy issued when you purchased your property is valid for so long as you own the property and the lien has not been paid off.
Your initial Mortgagee’s Title Policy does not protect against events occurring after the recording of your vesting deed and mortgage. Thus a new mortgagee’s policy is required when you re-finance the existing lien.
Lenders also insist on a new title policy because many mortgages are packaged as
securities and sold to investors in the secondary mortgage market. Title Insurance is
the only practical way to provide the assurance investors demand. Title Insurance
insures the mortgages backing these securities are valid and enforceable.
You may be entitled to a partial credit on the cost of your title policy. The rates
(and credits) are promulgated by the Texas Commissioner of Insurance.
Texas First can grant the same credits on re-finances as any competitor. We do not
have to be the issuing agent to grant such credits.
Owner's Policy
When you purchase an Owner's Policy of Title Insurance it remains effective until the property is sold to a new owner, even if that doesn’t occur for decades.
When you purchase a Mortgagee Policy of Title Insurance it remains effective until the mortgage that it insures is paid in full.
How much does Title Insurance cost?
Title Insurance is much more cost-effective than the other kinds of insurance you
purchase. The premium for title insurance is paid one time when you purchase the
coverage. There are no renewal premiums to pay.
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