Title insurance New York is a type of insurance that protects you from losing your home or land in the event someone successfully challenges your ownership of it. For example, if there are unpaid taxes on the property and the IRS or other taxing authority comes after you to pay them, title insurance will help you out. This insurance can only be purchased from a licensed broker like MacGregor Abstract.
Title insurance is not something you can have much control over. Most lenders require it before they’ll issue a mortgage loan, and they usually choose the title company. If you’re buying a house in New York City, however, there are some reasons why it may be worth paying for title insurance on your own.
Title insurance is a form of indemnity insurance predominantly found in the United States which insures against financial loss from defects in title to real property and from the invalidity or unenforceability of mortgage loans.
Title insurance is underwritten by insurance companies on either a “lender’s” or “owner’s” policy basis. The lender’s policy protects the lending institution if there are title-related problems that affect the value of the property loaned against, while an owner’s policy protects the buyer if there are problems with the title which affect the value of their investment in the property.
Title insurance is different from other types of insurance, because it is based upon a one-time premium paid at closing, and covers only those risks that existed before the date of issuance.
The title search performed by a title company may reveal two types of defects: patent and latent. A patent defect is an obvious problem with your title that is readily revealed by searching public records; for example, an existing deed or mortgage affecting your property. A latent defect, on the other hand, is hidden; for example, a forged deed that cannot be discovered except through an exhaustive search and examination of all records affecting your property over a period of years. For this reason, lenders require title insurance.
A lot of people are surprised to find out that a title company is not just someone who prepares documents and files them in the courthouse. Title companies actually do a lot of work behind the scenes to make sure that the home you are buying is free and clear of liens and other encumbrances.
The first thing they do is run a search on your behalf. They contact the courthouse where the property is located, and they make sure that there are no judgments, liens or other things filed against the property. They also make sure that there are not any easements or encroachments which may interfere with your ability to use the property as you wish.
Next, they will do an examination of title for you, which means that they will look through all of the previous ownership records for the property going back about 60 years or so. They will identify all of the owners who held title to it previously, and then figure out how title transferred from each owner to the next. If something is missing from this record, such as a deed or other document transferring ownership, they will search their records to find out if they missed anything.
Finally, your title company will prepare a commitment for title insurance on your behalf. This document states what title insurance coverage you have.
