FAQs

A title defect is anything that may hinder a “marketable,” transferrable title to the property. Title defects could include tax liens, judgments from missed payments, an unrecorded driveway easement making the property land-locked – there’s many possibilities that a title search and Owner’s Policy could protect you from.

Typically the title insurance premium is roughly ½ to 1% of the purchase price for an Owner’s Policy or the loan amount for a Loan Policy. Unlike other insurances you purchase while being a homeowner, title insurance premiums are only paid once, at the time of closing.

Loan Policy – A Loan Policy or Lender’s Policy is typically based on the loan amount and will decrease throughout the life of the loan until it’s paid off, at which point the Loan Policy is void. This policy only protects the lender’s interest and that their lien is valid and enforceable. The borrower typically is required to pay for the Loan Policy in their closing costs on the lender’s behalf.

Owner’s Policy – An Owner’s Policy is typically based on the purchase price of the property and will not decrease below this amount. Unlike a Loan Policy, an Owner’s Policy protects you and your heirs from covered title claims as long as you maintain an ownership interest in the property.

When you purchase title insurance, our team exhausts the public records to ensure we have the most up-to-date recorded information. By doing this, we can note and correct potential or current title defects to ensure you’re left with a “clean title” that mitigates the chance of your ownership interest being challenged. The protection of title insurance goes even farther than that, meaning your Owner’s Policy can be passed down to protect your heirs for as long as you continue to have an interest in the property.

Should your interest be challenged, your Owner’s Policy protects you from suffering legal fees, the need to get your own legal counsel, and any actual damages caused by the court proceedings, up to your policy limit.

• Missing/Undisclosed Heirs
• Forgery
• Judgments or liens against the property
• Easements

As stated above, the Loan Policy is to protect your lender’s interest and ensures a valid, enforceable lien on the property. A Loan Policy will almost always be required by a lender, even if they were the ones that financed your original purchase, to disclose any current liens, judgments, or mortgages that may need to be paid off or cleared before your refinance can happen.

While your home may be brand new, the land it’s built on is not. For example: If a builder purchased property that formerly was a family farm, an heir of the previous owner may challenge your ownership of the property stating they were supposed to inherit the land at someone’s death; if the courts rule in the heir’s favor then you potentially lose your newly built home, the land, and you would be responsible for any court and lawyer fees incurred while defending your ownership.

Title companies do an extensive search through the public records and the courthouses to find any liens, judgments, easement issues, mortgages, gaps in the chain of title, and much more before you get to the closing table to ensure that the property you’re purchasing can be properly and clearly conveyed to you. Clearing and correcting title defects can take days to weeks depending on their severity, age, and what the issue is.

Just like when you mortgage a property, your lender will typically open an “escrow account” for you, which is an account where they hold funds on your behalf for things like homeowner’s insurance, taxes, and PMI. Much like your mortgage company, title companies initially hold and disburse funds between the parties involved in a transaction which is called escrow. Your real estate agent or lender may even refer to us throughout your transaction as “escrow” – this is a common name given to your title company, so that will still be your regular Springdale Title contact.

The “chain of title” simply refers to the list of previous owners of said property. Additionally, a title defect, or the possibility of one, may be referred to as a “broken link” in the chain of title; that’s why our team works proactively to ensure there’s no room for “broken links” in the chain so you can rest easier.

Key Differences Between Regular and Enhanced Title Policies:

• Two forms of identification with at least one of them being a government-issued photo ID
• Any additional information or documentation that your lender, real estate agent, or Springdale has requested you provide
• Your funds required to close (as provided by either your lender or the Final Settlement Statement) in accordance with state law. (Please reach out to your Springdale Title closing contact to verify if closing funds in your state are required to be remitted by wire transfer or cashier’s check.)

You should reach out to the title insurance underwriter to file a claim. After closing you will receive your Owner’s Title Insurance policy in the mail. Place that document in a safe place with other important information so that you know where to locate it. If for some reason you are not able to your policy, or are not able to ascertain how to reach the title insurance underwriter, reach out to your local Springdale Title branch for assistance.