Who is responsible for title insurance?

 insurance

When you buy a home or property, you need to be sure that the seller is the real owner of the home. You want to purchase a home that has no claims and liens against it. If the title of the home has problems, you will incur losses and you will not be able to use the property. For this reason, title insurance is necessary to guard you against any risks arising from the seller’s nonpayment for the house and related issues. Your home needs to have title insurance from a New Jersey title insurance company.

Now, one of the queries many home buyers in Hudson county and Bergen county have is about the title insurance.  Who is responsible for it? Is it the buyer or the seller? Can the two share the closing costs of the home? Well, the payment of title insurance varies from state to state. However, in New Jersey, the title insurance is the responsibility of the buyer. It is still possible for you to negotiate with the seller for a concession. The title policy rates are the same in the state of New Jersey. There are however, some ancillary fees that are associated with the title. These can vary though.

How does the title insurance work?

Title insurance is ideally a two part type of a transaction. The first part of this process is where the attorney searches the property records to make sure that there are no clerical errors or mistakes in the examination of the records, omissions in the deeds, undisclosed heirs or unknown liens that would make it difficult for you to own the home fully. Any fraud in the deed will be determined at this stage. The search will determine if the seller of the property is indeed the owner of the property and that he is free to sell it. insurance papers

The second part of the title insurance is the underwriting stage. The attorney who does the search for you will, at this stage, contract an underwriting company to issue you a title insurance policy. This policy is important as it will defend you in future should someone challenge your title. The insurance policy will also compensate you in the event that you will lose your property out of this claim.

Lender’s policy and Buyers policy

The title insurance will be a combination of 2 policies, namely; the lender’s policy and the borrower’s policy. If you are taking a mortgage for the purchase of your home, the lender will require you to take a lenders policy. This is also known as the mortgagee’s policy.

The lender will also need you to take an owner’s policy. These two policies will cover any legal fees that can arise from someone claiming the property. The policies will also cover the losses that you and the lender would have insured should the property be lost to the claimant.

Recent Posts

Leave a Comment