Fairfax Title Company Blog

As you get into the process of buying a home, you will quickly see that there are many moving parts. Included in these you may have noticed a title insurance policy which is likely also a line item included in your closing costs. You may wonder what this type of coverage does and whether a lender’s policy is different from an owner’s policy. The bottom line is that an owner’s policy provides you, the homeowner, with the protections that title insurance offers while the lender’s policy provides those benefits only to the lender. Here is what you need to know about what an owner’s title insurance coverage can do for you.

A Lender’s Title Insurance Policy vs. An Owner’s Policy

When you buy a new home with a mortgage, there is always a small chance that someone else could come forward with a legitimate legal claim to your property. Should this happen, both you and your lender may potentially lose a significant amount of money. For this reason, you will likely need to pay for both a lender’s title insurance policy and an owner’s title insurance policy.

A lender’s policy protects the institution providing your mortgage, and an owner’s policy protects you. If your claim to your property is overridden, your lender loses all of the money you didn’t pay back in your mortgage. To ensure that they don’t lose this investment, lenders generally require you to have a lender’s policy ensuring the insurance company will pay them back the deficit. Most lenders include the cost of this policy among the fees that you pay to close on your home.

Since the required lender’s policy does not cover you, you will need your own owner’s title coverage. An owner’s policy protects your investment and any unexpected payments that may come up as a result of the legal trouble.

Why You Should Buy Title Insurance

Title insurance may seem like just another unexpected cost of buying a house—and it is optional most of the time—but it is an important investment that can protect you from significant financial losses. Title insurance is a safeguard against possible hidden issues with your deed or legal claim to your property. Even if you conducted a title search before buying your home, these conflicting claims may still be lurking.

While these problems are uncommon, they are not necessarily rare, and the effects can be devastating. Not only will you risk losing all of the money you have put into down payments and mortgages, but you will also be responsible for any legal representation to defend your investment.

Title insurance is not just for properties that are a new purchase. A claim could be unearthed at any time, and the longer it takes for that situation to be discovered, the more money you will have put into your mortgage and the more you stand to lose. Title insurance purchased during closing protects you the entire time you own the home.

What Title Insurance Can Protect You From

There are many legal issues that can affect your claim on some or all of your property. Title insurance can give you back the money you lost through your mortgage, property or home value. Common event coverages include:

• A deed that has not been filed correctly. Mistakes such as an incorrect name can bring your claim into question.
• Information on a deed that is fabricated or false. Forged signatures and incorrect facts about the property can make it unclear who the past or current owners should be, the true extent of the property and the value of the property.
• Mortgage fraud. If a previous owner falsely claimed their mortgage was paid, the result could be foreclosure.
• Liens. These are debts that are attached to the property. They could include fines from homeowners’ associations, not paying for work done to the residence, unpaid property taxes and more.
• Encroachments. A neighbor may have built something that extends into your property. You can also be protected from the consequences of a previous owner had built something that extends into a neighbor’s property.
• Easements. A third party may have the right to use some of your property. This could mean a utility company can install something in that area, or it could be dug up to replace some drains. Insurance can reimburse the loss of property value this creates.

Trust the Experts For The Right Owner’s Title Insurance Coverage

If you are ready to select a title insurance policy to protect your new investment, be sure to rely on experts who understand how to keep your home safe. The professionals at Mathis Title Company will gladly answer any questions you may have and provide personalized guidance. Contact our team to schedule an appointment or learn more.

When you are in the process of buying a home, you already have a lot to think about. From whether the neighborhood is ideal for you to how the price tag will impact your financial future; therefore you may not have considered whether the home’s title is also clean.

A title search can help you to understand the condition of the home on paper, including who it has been sold to in the past and whether there are any debts outstanding that you may be responsible for if you complete the purchase. Here are some of the reasons why a home title search is worth your time and investment.

What Is A Title Search?

A home title search on a property is an investigation of public records related to the property to establish who owns the title and, therefore, whether the person selling the house is the rightful legal owner. It also determines whether there are any claims, liens or other issues that could lead to problems for you later.

This task is usually ordered by an attorney or title company, and performed by an abstractor. To do a title search, the abstractor examines public records regarding the property including sales transactions, surveys, easements, wills and lawsuits.

From the relevant documents, they will create an abstract of title, which chronologically summarizes the legal information about the property and may list any previous and current owners in a chain of title. The process generally takes approximately one to two weeks, though it may take more or less time depending on how quickly various offices respond and the age, and by extension, the number of documents relevant to the house.

How Can A Title Search Help You?

A title search is valuable for multiple reasons, including:

1. Monetary Security

The primary benefit of a title search is that it can save you money. It helps locate any financial rulings against the title owner. For example, since debts can be associated with a property and not the owner, you would be expected to pay for costs such as outstanding liens for services rendered but unpaid and any delinquent property taxes.

2. Home Security

A title search may reveal that the person selling the home does not actually have a right to do so. If this is the case and you buy the home from them without doing a title search, your home could be seized from you after the purchase since you would not have the legal right to own it.

3. Avoiding Mortgage Issues

Even if you are willing to shoulder liens or other issues that come with a home’s title, your mortgage company will not be willing to risk their investment. A mortgage company will require the assurance of clear title.

What Does A Title Search Cost?

A title search usually costs approximately $75 to $300, though this may vary depending on the state and county in which the property is situated. This cost should be considered as another necessary step in the home-buying process. Should you choose to attempt to save money and do the search yourself, know that you are taking a risk of missing something that may be critical, that a trained professional will be far less likely to overlook.

Do I Need Title Insurance If I’ve Done A Title Search?

When the title search is complete, title insurance can be another valuable protection for your home. It protects against the many unfiled claims that cannot be found against a title OR just in case the title search missed anything. Since these kinds of claims can take away your legal ownership of your new property, ensuring that you are prepared for them is very important.

Similar to a home title search, title insurance protects you against losing money due to a bad title. However, a home title search tries to find sources of a bad title ahead of time, whereas title insurance protects you against a bad title after it has become yours.

The cost of title insurance is related to the price of your house and varies by state, and it is a single purchase usually added to your closing costs.

Trust The Pros to Help You Understand Your Title’s Potential Issues

If you are preparing for a home title search, understand that this small investment now can be critical to your long-term financial security. The experts at Mathis Title Company would be happy to help you navigate this process. Contact our office to learn more or to schedule an appointment to protect your property.

Your home is one of your most important investments, but it is not immune from fraud and forgery that could threaten your ownership. Since homes are so valuable, they can easily become the target of someone trying to commit theft. You should always remain vigilant against home title fraud, and here is the information you need to make a plan.

What Does Home Title Fraud Mean?

Home title fraud is a term referring to potential forgery or other criminal acts that can transfer ownership of a home without an owner’s consent. The true owner does not agree to, or perhaps even know about, this transfer. Sometimes, the person committing the fraud might be trying to move the home into their name; other times, they may try to procure a loan that they don’t intend to repay by using the home as collateral, leaving the real owner financially liable for the debt.

Regardless of in what form the fraud occurs, you may be left without recourse if you do not have coverage from title insurance, or if you do not catch the issue early enough. That is why taking a proactive approach to protecting your home from title fraud is important as it can save your home.

Protecting Your Home from Title Fraud

Title fraud often occurs due to some inaccuracy with the deed of the property. Simply submitting the deed to the public record does not mean that it is accurate, and someone committing fraud will use this to their advantage. The county clerk is only responsible for filing this information, not verifying its accuracy, nor are they responsible for confirming that any change has occurred with the buyer and seller’s consent.

The good news is that there are many steps you can take to shield yourself from the risk of title fraud. Remember to:

1. Keep Your Internet Security High

Title fraud often comes alongside identity theft, which primarily arises out of poor internet hygiene. If you use simple, easy to guess passwords that are the same across all of your important websites such as your bank, email and social media, someone may easily be able to steal your information, pose as you and do whatever they want with your home details. They could take out a home equity loan against your property, in your name, or even “consent” to sell your property. Keep your passwords strong and change them often.

2. Learn About Common Scams

As part of identity theft, you may be subjected to common scams. Keep your internet knowledge up to date so that you can spot phishing attempts, and never click on links or emails that you do not recognize and trust. This could compromise your information and let others see important details about you. Never provide personal information over the phone. If you receive a call claiming to be from an institution you trust, such as your bank, hang up and call them back on their official number to resume the conversation.

3. Maintain Secondary Properties

If you own a second home, vacation home or other location where you do not frequently stay, make sure to visit more often or pay to keep it well maintained. Indications that you do not stay aware of the property, or are often gone from a primary residence, make it a more appealing target for fraud, since it will likely be some time before you notice that something is amiss.

4. Freeze Access to Your Funds

Keeping your credit frozen is a simple way to prevent unauthorized credit lines from being opened in your name. However, if you think that title fraud has already occurred, freeze your bank account as well. If you can stop the fraud perpetuator from successfully transferring the funds for their deal, you may halt their process before significant damage is done.

5. Check Your Title Insurance Coverage

Depending on the type of title insurance coverage that you have, you may be protected against fraud, especially if the fraud attempt started before you closed on the home. This is why securing title insurance is so important. Not all policies will cover this type of fraud, but check with your insurance agent.

Trust the Experts to Help You Secure Protection from Home Title Fraud

Whether you want to keep fraud as far away from your home purchase as possible or you suspect that something is already amiss, you have options. Title insurance is one way to secure your home against fraud, and the experts at Mathis Title Company would be happy to help you understand all of your options. Contact our office to learn more about title fraud protection or to set up an appointment today.

Title insurance is one of the many options available to protect your home after and during a purchase. Many people assume that it functions similarly to homeowner’s insurance; however, title insurance differs not only in the type of coverage it offers but also how you pay for it and more. As you prepare to take the next step in your home ownership journey, be sure that you understand what owner’s title insurance provides, who pays for owner’s title insurance and how to establish a policy.

Do Sellers Provide Title Insurance?

One of the most common misconceptions when buying a home is that it is either the responsibility or ability of the seller to provide title insurance to the new buyer. Some people believe that if the seller had title insurance of their own, then the property is protected, and that policy will transfer to them when the deed transfers. However, this is not true.

The standard Northern Virginia Board contract, which many realtors use, states that title must be insurable amongst other things. That means that if there are title discrepancies, the seller must act to fix those. The standard Northern Virginia Board contract also provides that Purchasers pay for the title insurance. BUT, as we have always stated, nothing is written in stone. If the parties agree to change the contract, strike through and initial those changed provisions, then the new provisions prevail.

The Difference Between Owner’s And Lender’s Policies

The buyer is responsible for taking the action to acquire an owner’s title insurance policy. If you have already viewed some of the paperwork for your purchase, you may have noted that the lender estimate has likely added a line item for title insurance. However, what you are likely looking at is the lender’s policy which provides protection only to the lender for their interest in your property.

If you acquire a mortgage for a home, the lender must ensure their investment is protected against loss. They typically require title insurance for their interests, and it is your responsibility as the buyer to provide this to them. The fee that you pay for title insurance when buying a house is most likely the policy for your lender and offers no coverage for you.

An owner’s policy, on the other hand, is the policy you purchase in your name, and will protect you.

Calculating The Cost Of Title Insurance

Unlike many other types of insurance which require that you pay a premium each month in order to maintain coverage, title insurance is a one-time cost. You pay a one-time fee and are then protected as long as you own the home and in some circumstances, beyond.

You may be able to secure a lower cost for your policy if you purchase the lender and owner policies at the same time. This is called a simultaneous issue rate. If you choose to refinance later, you will not need to pay for an owner’s policy again and in fact, may get lender policy discounts based upon the presence of an owner’s policy.

Your real estate agent will likely recommend a title service with whom they often work. However, you are under no obligation to use any one specific company.

Why Title Insurance Is Worth The Investment

Title insurance safeguards your home against the risk of significant financial loss, or even loss of the property itself. For example, if a family member granted the home to a relative through a will but the relative was unable to be located or thought deceased. Years later, the relative may appear after you have purchased the home.

Without title insurance, this person would be considered a legitimate heir to the property because of the will, which means that you would be at risk of losing the home. Title insurance safeguards your purchase against potential challenges such as this and will provide counsel and pay legal fees if necessary to defend your right to keep your home.

It will also shield you from liability if liens on the property are discovered after closing. This could include situations in which the previous owner hired a contractor to perform a service or other work on the home, and then did not pay for the services/materials rendered. The contractor would have then filed a lien with the county against the home. This means that when the home is sold, the outstanding balance due from the previous owner must be paid.

Trust The Experts To Help You Secure An Ideal Title Insurance Policy

If you are interested in learning more about title insurance or are ready to purchase an owner’s policy for your new home, be sure to work with trusted professionals. The experts at Mathis Title Company would be happy to answer any questions that you have. Contact our team to learn more or to schedule an appointment.

There are many moving parts within the purchase of a home, and this becomes especially evident during closing. As a buyer, you will likely sit down with professionals to sign what appears to be an endless stack of papers. Among these forms is the deed to the property, which both the seller and the buyer must sign. Unfortunately, a scammer can forge a signature or otherwise change a deed to misrepresent who owns the property. This is called title fraud, and it can have very serious repercussions for the owners, from financial inconveniences to the possibility of losing the home entirely.

What Is A Title And How Can It Be Fraudulently Used?

A title is not a physical document, even though it is often presented as such. Instead, it is a concept representing who owns a property as conveyed by the deed which is the physical document that confirms this information. Your title gives you the permission to enjoy and control your property, as well as the right to own it and do what you like with it.

If someone tries to commit title fraud, they will do this by attempting to change the deed without your knowledge. For example, they may forge your name in order to try to sell the property to themselves, or they may try to take out a loan for themselves using your property as collateral. In this way, they secure money for themselves, but your property is on the hook for unpaid payments and other unwanted consequences.

Protecting Yourself Against Title Fraud

There are some steps you can take to reduce the chances of being targeted for title fraud or to reduce the impact if you do fall victim. When possible, avoid having the property be vacant, as it can appear to scammers that you are not giving the property attention, making your property and you easy targets. You may sign up for a title lock; however, this service does not preemptively protect you from fraud. Instead, it notifies you if any important information about your title has changed. It can be a valuable tool to keep you on top of potential forgeries, but you will still need to clean up the damage on your own.

It is also important that you regularly check your online records with the county to make sure that nothing has been filed that you were unaware about. If you get home-related documents in the mail, even if they do not have your name on them, be sure to review them for evidence of suspicious activity.

Using Title Insurance For The Most Protection

Although you can do your part to stop title fraud from progressing once it has occurred, one of the most effective ways of stopping fraud is to secure a title insurance policy. Title insurance offers broad protection not only against fraud, but also for other challenges such as undisclosed liens. You may purchase title insurance at any time, but it is most commonly part of your pre-closing requirements; your lender will want to see that you have title insurance so that their investment is protected.

If you do become a victim of title fraud, a title insurance policy will help to cover the costs of disputing and resolving the case. It will also shield you from claims on the property, such as from formerly unknown heirs. Title insurance is simple, you pay for it one time which then protects you for the duration that you own the home.

Be Sure To Check: Owner’s Policy Or Lender’s Policy?

One important detail to note about title insurance is that you should verify whether you have completed your application and secured this coverage. When buying a home, you may have already paid for title insurance and believe that you are protected. However, most lenders will require you to pay for their policy which will be listed on the closing documents. That policy will cover the lender for their investment in you and your property. The homeowner is not protected by the lender’s title insurance; if you want your own protection, you must secure an owner’s title insurance policy separately.

Trust The Experts To Help You Keep Your Home Secure

Title fraud can be an overwhelming event with immense consequences that can negatively impact your finances. The good news is that a little extra effort and a robust title insurance policy can provide considerable protection from the effects of title fraud. The experts at Mathis Title Company would be happy to help you with a customized policy that addresses all of your needs and risks. Contact our team to learn more about how title insurance can work for you, or to get started on a policy for your home to help prevent fraud as quickly as possible.