Frequently Asked Questions

What is Title Insurance?

Title insurance is a protection for the buyer and the lender from any defects in the quality of the title. These defects include open mortgages of prior owners, non-discharged tax liens, unpaid judgements against prior owners, fraud and claims by others to the title of your property. The title company which insures you will not only satisfy any claims, it will provide legal support for you as well.

How does the process work?

Title searches are done at the county level to trace back the chain of title through prior owners. The deed and mortgage records are kept by the county clerk or register at a vault at the courthouse. They are indexed by name. Certain recorded judgements and liens are also indexed. A search of municipal tax and assessment records is done on the property. In addition, state judgement searches are run against the names of all parties. (If you are sued and a judgement is obtained against you in New Jersey, for example, that judgement is a lien on real property for 20 years or until it is paid and discharged.) Once all this information is compiled, it is the responsibility of the attorney or settlement agent to correct any potential defects in title prior to closing.

If defects are corrected, why do I need insurance?

Frequently, mortgages, judgements, and liens are either misspelled, not indexed properly, or simply overlooked when filed with county or state agencies. Moreover, fraud or mistakes by other parties may not be discovered until well after closing. Without insurance, you could find yourself responsible for paying out large sums for damages and legal fees. You could even end up losing the property without any compensation. Title insurance minimizes these risks.

If I am refinancing, do I still need title insurance?

Your mortgage lender will probably require you to purchase a new, updated loan policy because your new lender is not covered by either your owner’s policy or the current lender’s policy.

How much does title insurance cost?

New Jersey title insurance premium rates are regulated by the New Jersey Department of Banking and Insurance.

New York title insurance premium rates are regulated by the New York Department of Banking and Insurance.

Additional costs for county, tax, and judgement searches are also paid by the borrower/buyer.