What is Title Insurance?
What is a Commitment for Title Insurance?
The commitment for title insurance is made up of 4 schedules A through D.
SCHEDULE A describes the amount of title insurance coverage to be issued in the Owner's Title Policy, how the title is vested at this time, prior to closing and contains the legal descriptions of the property to be insured.
SCHEDULE B describes the restrictions, if any, and other title exceptions found, including but not limited to easements (if any) that affect the property at this time and which will be listed as exceptions in the Owner's Policy.
SCHEDULE C describes the liens shown of record affecting the property that are being paid off or assumed in the proposed transaction and any title curative matters that the title company may require to be handled prior to closing and the issuance of a title policy.
SCHEDULE D discloses the ownership, control, and senior management of the Title Insurance Company and the issuing Title Insurance Agent and the estimated amount of the title premium to be collected and the names of all parties receiving a distribution of any portion of the premium.
Why you need Title Insurance
You and your lender want to make sure that the property you are buying is indeed yours free of any rights, liens, claims, or encumbrances by an individual or governmental entity.
Title Insurance companies are in business to make sure your rights and interests to the property you are buying are clear, that the transfer of title takes place efficiently and correctly and that your interests as a buyer are protected to the maximum degree.
Title companies usually issue two kinds of policies an "owner's" which covers you, the buyer and a "lender's" which covers the mortgage lender over the life of the loan. Both are issued at the time of purchase for a one-time premium.
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