Getting Title Insurance is a requisite for purchasing your first home. Though it’s a requirement, there are specialized terms that could be esoteric to many interested in real estate purchases. Regardless, it’s important to know some of these terms before you purchase any title insurance.
Title Insurance Terminology
- Title Insurance: A loss-prevention insurance policy designed to protect you against legal defects in the title that happened prior to purchase.
- Owner’s Policy: This insurance policy covers the homeowner.
- Lender’s Policy ( Mortgage Insurance): This insurance policy cover’s the mortgage lender.
- ALTA: When it comes to purchasing title insurance, you will hear this term quite often. ALTA, American Land Title Association, is the leading trade association of title insurers. Throughout the U.S, ALTA policies are widely utilized and preferred by credible lenders. Be aware of ALTA Residential and ALTA Homeowner’s policies before digging into residential property transactions.
- Escrow: This term refers to the funds that you provided as earnest money when you made the initial offer on the property. Your escrow holder, normally a title insurance company like Colony Title Group, places these funds into a special account. Once all obligations related to your property are met, these funds will get released. Typically, this step happens during a property closing.
- Titles Search: Title agencies, like Colony Title Group, perform a thorough check of public records to make sure that the property is legally available for sale.
- Title Report: A report that contains the results of the title search.
- Abstract of Title: A document that shows the complete ownership history of a piece of property. This type of document normally has a listing of all past property owners, mortgages and liens.
- Encumberances: Legal interest in the land which may or may not affects its value. Normally, encumberances take the form of zoning ordinances, claims or unpaid taxes.
- Lien: A financial claim to the property. Essentially, this takes the form of mortgages, mechanic or contractor liens. It’s imperative to have liens paid off before a mortgage lender will even allow the property sale to take place.
About Colony Title Associates:
Founded in 1995, Colony Title Group handles in excess of 2000 real estate closings per year in the central Maryland area. The founder Tee Tillman has over 23 years experience in the title and real estate law fields. Colony handles closings for several lenders, including banks, credit unions and mortgage brokers. Colony is the preferred choice for many real estate brokers in the area.
Colony Title specializes in real estate title insurance, real estate settlement services, and real estate closings in Baltimore, Columbia, Maryland, Washington DC, and Virginia. Our staff consists of licensed Title Insurance Agents, Real Estate Agents, Settlement Processors, & Attorneys to handle all of your real estate needs.