How does Title Insurance work?

After approval of your application, a licensed title company will perform a title search on the property. This step will uncover any possible problems with the legal ownership of the property. Possible problems include disputes by outside parties about the ownership of the property, the size of the property, and so on. For example, there may be an unknown heir, a secret spouse or a faulty land survey. Title searches are usually set up by the borrower's real estate agent or lawyer. If the title company does not find any problems in the search, the title company will issue title insurance. Having title insurance will guarantee the property is as it is stated in recorded deeds, surveys and other documents. You may pay a title insurance premium when you buy the house. However, you will not have to pay another title insurance premium unless you refinance.