What Is Title Insurance And Why Is It Important?
To put it simply; title insurance is an insurance policy which protects/indemnifies the buyer/holder for any loss incurred due to omissions or defects in the title of the character.
Title insurance is usually arranged as a single premium policy whereby you pay for the insurance as a lump sum upfront payment. Some mortgage lenders may already stipulate that title insurance be a condition of the mortgage offer however this is not all that shared. If title insurance is purchased via the mortgage lender then it is shared for the single premium to be additional to the loan improvement. Title insurance does not just protect the borrower but also serves to protect the lender also.
Taking out an insurance policy can also cut out the need for much of the legal work that a solicitor will usually have to carry out. In this way it can help to speed up the time of action of remortgaging quite considerably.
Many mortgage brokers will confirm that the timeframe involved in completing a mortgage/remortgage application can differ largely from one application to another however it is for a remortgage deal to take some 30 days to complete, already once the offer has been granted.
Research was recently carried out by one of the major lenders which suggested that the presence of title insurance could slice around 10 days of the normal completion time. Where there are no issues with a case, an application could complete in as little as three days after the point of mortgage offer.
basically, a title policy will be arranged to protect the validity of the title. A defective title simply method that there is a problem with the mortgage deeds – this commonly method that the deeds may be missing, destroyed, lost, or in some way inadequate. Title can be also be exploited by such problems as fraud – being carried out by the borrower, or indeed against the borrower.
Where appropriate title insurance is in place, the policy itself will last for as long as the mortgage term and will guarantee that the loan is valid, enforceable and on a marketable title.
Where a borrower is remortgaging their existing character, the reality is that it is highly doubtful that there will be any issues with title as all the applicable checks would have been carried out when the character is purchased – However, any mortgage lender will nevertheless require a appropriate amount of legal work to be carried out so as to protect themselves in the event of borrower default.
In the doubtful example of a problem occurring due to title defect; title insurance is not their to simply solve the immediate problem however it will ensure that no parties to the mortgage lose out financially.