 |
 |
Why We Need Title Insurance When Refinancing or Selling Our Homes
By Sheryl Landrum
CMR Columnist
 E-mail Friend
 Printer Friendly
Possession of a grant deed is not necessarily a guarantee of ownership. Whether you are purchasing a new home or refinancing your existing one, California requires that most properties include a title search before they grant a home mortgage loan. The title search eliminates any risk of title, risks that can jeopardize your home loan refinance or home sale.
Many home loans can be jeopardized by title defects. Title insurance guarantees that title to the property is as recorded; it also guarantees to the purchaser of the property that if it is not as reported, and the owner suffers damage, the title policy will cover the insured for their loss. The title company searches public records to determine current recorded ownership and claims against the property. Until ownership is cleared and title can be granted, a lender will not close on a mortgage loan on that property even if it is a refinance of an existing mortgage loan. Therefore, homeowners who are seeking to refinance or sell their homes cannot do so until title has been cleared. So how do you protect your property's title?
Current homeowner's may find unknown title liens when refinancing their home loans. One of the most common title claims for homeowners who are refinancing is from contractors who have worked on their property. Often contractors who are remodeling homes place mechanical liens against the property until the job is finished. If a contractor hasn't removed the lien, for whatever reason, the lien will show up in a title search and delay your home refinance or sale until it is removed.
If you are thinking about selling your home or refinancing your home mortgage, talk to a trusted real estate professional and have them run a preliminary title search of your property. Then, once you know your property's title is clear, you can proceed with confidence and without any delay.
About the Author
Sheryl Landrum is a Senior Loan Officer with Charter Funding in Carlsbad, California.
|
 |
|
|
|
|
