What is Title Insurance?
Title Insurance is a policy that guarantees to cover losses in the event someone else makes a claim against the title. This can include numerous types of ownership claims, including estates, unknown heirs, mortgages, judgments, tax liens, adverse possession, and others. The policy can be either an Owner's Title Policy or a Lender's Title Policy.
Q. Am I required to purchase Lender's Title Insurance?
A. Yes, if you are obtaining a mortgage, your lender will require title insurance to guarantee their money is secured by a clear title.
Q. Do I need Owner's Title Insurance?
A. Yes, when you make the largest purchase of your life, if you do not have Owner's Title Insurance, you could lose all of your financial assets you have accumulated in your lifetime. This could include not only the equity in your home, but all of your other assets which could be attacked in order to cover the amount of money you borrowed to buy the home. In the event of a successful title claim, without Owner's Title Insurance, most people would surely be forced into Bankruptcy.
Q. Since I have to buy Lender's Title Insurance, why do I also need Owner's Title Insurance?
A. Lender's Title Insurance only covers the Lender. It does not protect the Owner. In the event of a claim, without Owner's Title Insurance, although the Lender would be paid, not only would the owner lose their equity, but also this would not relieve the borrower of his responsibility to repay the loan even though the owner may not have ownership of the property.
Q. How much does Title Insurance cost?
A. The premium is based on the cost of your house and is regulated by the State of Maryland. You should contact our office with the purchase price and we can provide you with an exact quote.
Q. Am I required to buy Owner's Title Insurance?
A. No, the choice to buy Owner's Title Insurance is optional. However, based on the relatively low one time cost, and potential financial disaster to you, it is rare that a buyer does not purchase Owner's Title Insurance.
Q. Does the lender include the cost of Title Insurance in it's closing cost estimates?
A. Yes, the Lender discloses these items on your good faith estimate.
Q. Do I need to pay for Title Insurance every year?
A. No, the cost is a one time premium payable at settlement and lasts for the entire time you own the property.
Q. If I refinance do I need to buy Owner's Title Insurance again?
A. No, assuming you purchased Owner's Title Insurance at the time of purchase of your property, the policy remains in full force. In the event you did not buy Owner Title Insurance at the time of your purchase, you can opt to purchase it at the time of your refinance.
Q. If I buy land only, without a house on it, do I need Title Insurance?
A. Yes, Title Insurance covers both the land and the house. In fact, in the event you plan to build a house later on down the road, you should consider purchasing Owner's Title Insurance for the increased value you anticipate with the house ultimately built.
Q. Where should I keep my Owner's Title Insurance Policy?
A. Both your Title Insurance Policy and your Deed should be stored in a very safe place. A safe deposit box, or at least a fire proof safe would be desirable.