Frequently Asked Questions: Real Estate Law
What is title insurance and when is it acquired?
The Buyer/Borrower’s Bank attorney typically issues the title insurance policy, insuring the quality of title to the real estate involved and which sets forth the exceptions to the title, following the closing and recording with the Registry of Deeds and/or with the Land Court. The Bank’s title policy is known as the Loan Policy and the Buyer/Borrower’s title insurance policy is known as the Owner’s Policy. Banks always require that the Buyer/Borrower obtain, and pay for, the Bank’s Loan Policy, and an Owner’s Policy is also available to be purchased by the Buyer/Borrower to acquire an Owner’s Policy. These policies are issued at the time of closing. The title policy insures the quality of the real estate being mortgaged and/or purchased, and it also sets forth in the Schedule of Exceptions to Title matters such as easements, restrictions, takings, reservations, covenants, and other encumbrances which affect the title to the real estate, and the title policy premium is paid for at closing by the Buyer/Borrower in a single/one-time premium. Experience indicates that most buyers do acquire the owner’s title insurance when they purchase their property. If their property is later refinanced, there is generally no need to again purchase an Owner’s title insurance policy, although the Lender will require a new Loan Policy at the time of refinance, since the title insurance policy insures the title to the property as of the date and time that the deed and/or mortgage is recorded.
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