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To protect your real estate investment, quite possibly, the largest investment you will ever make. Your title insurance will protect you from a serious financial loss in the event of a claim regarding your ownership of the property or an undetected defect in the title.
The charge for title insurance is related to the sale price of the property if you are purchasing. If you are refinancing, and have an existing title insurance policy, then the title insurance will be protection for the lender and will be based on the amount of the new mortgage.
The Title is evidence that a person and/or an entity such as a corporation or partnership owns and/or possesses a piece of land with or without improvements (i.e. buildings). Determination of ownership is proven by tracing the history of ownership of the property by documents recorded in public records of the county in which the property exists. This is called the “Chain of Title” It is possible that another person or entity may lay claim to having a legal interest in the property. This interest may be one of ownership or involve access to the property or adversely affect your use of the property.
Title defects are problems concerning clear ownership of property. Typical problems are undisclosed heirs of a prior owner, unpaid taxes, unpaid contractors, IRS liens or other liens. In the event the defect in not discovered and remedied prior to settlement, it could be months, even years before a problem arises. When the defect problem does arise, then legal defense is necessary and even the potential of loss of the property.
Title insurance rates in Pennsylvania are set by the state. However, depending upon the length of the period from the last time title insurance was issued on the property, Reissue rates, Substitution rates may apply. These rates are lower then the Basic rate.
Unless you refinance, you will never pay any additional premium for your title insurance protection. It is good for as long as you own the property for you and your heirs. It is not transferable to a buyer of your property.
Yes, you will be required by your lender to obtain title insurance to protect the interest of the lender in your property. Your original title policy will continue to protect your interests.