If you refinance your home loan or obtain a new loan, your lender will most certainly require that the loan transaction be handled by an escrow company and that you provide them with a title insurance policy. The title insurance policy insures them that they can suffer no loss as a result of defects in the title to your home or defects in the loan documents.
In an escrow, the escrow company is the neutral third party who deals with a host of issues, including taxes, the existing lender, any title matters disclosed by an examination of the title and communication with your new mortgage lender. The escrow officer who handles your transaction is a professional who will follow the mutual instructions given by you and your lender to make certain that the prior loan on the property is paid off, the taxes are paid, and other matters such as assessments are taken care of. The escrow officer will also review all of the paperwork involved in your new loan with you, while taking your signatures and notarizing them.
When the escrow officer receives the loan documents, they will itemize all of the costs involved in your transaction and advise you, based on the amount and terms of your loan, how much will be disbursed to you on closing, or how much you need to bring in to the escrow in order to close. On closing, the Deed of Trust, which secures your new loan, will be recorded in the County Recorder’s office and all of the funds will be disbursed.
Most lenders will require that you provide them with a Title Insurance Policy as a part of the transaction. Most likely an Owner’s Title Insurance Policy was provided to you by the previous owner when you purchased the property. That policy provides you with a great number of protections against forgery, fraud, unknown liens and prior deficiencies in your title. It does not, however, protect your lender.
The Title Insurance Policy that your lender requires will specifically insure them against the same risky matters that your policy insures you against. It will further insure them that the Deed of Trust you signed is valid and enforceable.
Because many of the searching processes and many of the risks in the Owner’s and Lender’s policies are the same, the Lender’s policy is issued at a reduced rate when issued concurrently with an Owner’s policy or when an existing Lender’s policy is being replaced.
Yavapai Title Agency remains the only locally owned and operated title company in the county. We are committed to maintaining our complete title operations here in Yavapai County. We recognize performing this vital function locally not only assures in-depth knowledge and expertise, but keeps our community strong as our employees and their families are committed to our community.