What Is Title Insurance?
Title Insurance
Unlike most other forms of insurance that protect you against losses that may happen in the future, Title Insurance protects the insured against liens, encumbrances or defects in the chain of title to real property which happened in the past.
Owner's Policy
An owner's title insurance policy is written for the purchase price of the property and is customarily paid for by the Seller. As the purchaser of a parcel of real property, Title Insurance names you as the insured and protects you against claims against the real property that may have arisen prior to your purchase of the property. Title Insurance provides assurance to you that the seller's title is clear and marketable. In the event that a claim is made, your title insurance underwriter provides a defense against the claim at their expense.
The owner's policy remains in effect as long as the named insured is the owner of the property and the policy should be held in a safe place.
Mortgage Policy
A mortgage policy is written for the amount of the mortgage and is customarily paid for by the purchaser of the property. This policy protects the mortgage lender and assures them that it is in the correct lien position against the property.
The mortgage policy remains in effect until such time as the insured mortgage is paid in full. Should the owner of a parcel of property decide that he or she wants to refinance the property, a new policy is purchased, at a reduced, or "re-issue" rate because the prior insured mortgage loan will be paid in full.
Cost of Title Insurance
The cost of Title Insurance is based upon the face amount of the policy. The minimum charge for each policy, for the first $10,000.00 of coverage, is $190.00. Amounts above that are charged per $1,000.00 of coverage. There are two fee schedules for amounts of coverage over the $10,000.00 minimum because Michigan is divided into two areas. The county in which the property lies will dictate which area charges apply.
Please contact northern title agency, inc., for a quote for your particular situation.
What Happens When You Sell?
In the event that you are selling your property, customarily, you will be responsible for the purchase of a new title insurance policy for the purchaser. By keeping your title insurance policy and surrendering it to the title agent, you will be offered a discount rate for the purchase of a new policy.
Why Use a Title Agency?
A Title Insurance agent is a disinterested party. That is to say that a Title Insurance agent is cast in the role of a facilitator. It is the agency's responsibility to conclude the sale and purchase according to the written instructions found on the sales agreement. It is also the agency's responsibility, in the case of a new mortgage, to follow the instructions of the mortgage lender.
As a disinterested party, a title agency collects all monies, has all documents executed properly, records necessary documents, pays all parties who may be owed, and disperses loan and sale proceeds.