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Purchasing a home is one of the biggest investments most of us will make in our lives. When purchasing a home think of your title insurance as PEACE OF MIND. Title insurance is a means of protecting yourself from financial loss in the event that problems develop regarding the rights to ownership of your property. There may be hidden title defects that even the most careful title search will not reveal.

In addition to protection from financial loss, title insurance pays the cost of defending against any covered claim. Your lender will probably require you to obtain title insurance for their protection. The owner’s policy and the lender’s policy are two different policies. The lender’s policy only insures that the financial institution has a valid, enforceable lien on the property. Most lenders require this type of insurance, and typically require the borrower to pay for it. For a one-time premium, you can be protected as well as the lender. The owner’s policy is designed to protect you from title defects that existed prior to the issue date of your policy. Title troubles, such as improper estate proceedings or unsatisfied encumbrances, could put your equity at serious risk. If a valid claim is filed, in addition to financial loss up to the face amount of the policy, your owner’s title policy covers the full cost of any legal defense of your title. There are different types of owner’s policies available. Some of the newer owner’s policies provide protection from defects that occur after the issue date of your policy.

A closing is defined as “a meeting of all parties involved in a property transaction during which pertinent documents are signed and transferred, and funds are distributed.” Typically, it is handled by a closing agent, either a title insurance company or an attorney, and will last approximately 45 to 60 minutes.

The closing agent will begin preparation for your closing shortly after you sign your contract. A request for payoff information is sent for existing mortgages, as well as a request for any information regarding homeowners or condominium association dues and/or transfer fees. If a new mortgage is being obtained, the closing agent will work closely with the new lender to make sure that all of the lender’s closing requirements are met. A title exam is ordered to verify the seller’s right to transfer ownership, and to discover any outstanding mortgages, liens, restrictions, easements, etc., which may affect the property. A title commitment will then be issued to show any matters reflected in the title exam, as well as a determination of the documents needed to properly transfer the title of the property to the buyer. The closing agent will also work closely with the lender and Realtors to coordinate the ordering of the termite inspection, survey, homeowner’s insurance and flood insurance, if applicable.

When the lender has received all required documents from the buyer and the loan has been approved, the closing agent will schedule the date and time for the closing with all parties. The lender will prepare a closing package consisting of the loan closing instructions, fees charged in connection with the new loan, and any loan documents to be delivered to the closing agent. The closing agent will then prepare all of the necessary closing documents, including a closing statement outlining all costs associated with the transfer of ownership as well as fees charged in connection with the new loan. Copies of the closing statement are usually faxed or emailed to the lender and Realtors, if any. If the closing agent has been provided contact information for buyer and/or seller, they may also receive a copy. The buyer’s cash to close, if applicable, must be in the form of a wire transfer. The seller will also be advised of the proceeds of the sale of the property.

The closing typically takes place in the closing agent’s office. The closing agent, buyer, seller and any Realtors sit around a table together while the closing agent explains the closing statement as well as other closing documents. When all of the documents have been signed, including the deed, and the closing agent has collected all funds, the seller receives his or her proceeds from the sale, if applicable. After the closing, the closing agent sends the original deed and mortgage to the courthouse for recording. The completed loan package is sent to the lender. All remaining funds are disbursed according to the settlement statement, including mortgage payoffs. The owner’s and lender’s title policies are issued when the deed and mortgage are returned to the closing agent after recording.

LOCAL SITES

Alabama Department of Insurance                                             http://www.aldoi.gov/Default.aspx

Huntsville Women’s Council of Realtors                                                    http://www.huntsvillewcr.org/Pages/default.aspx

Huntsville Area Association of Realtors                 http://www.valleymls.com/(S(1lsnqmsmeljlwznnvvkmfdb4))/default.aspx

Alabama State Legislature                                                                http://www.legislature.state.al.us/

Link to Alabama County Websites                                                http://www.info.alabama.gov/directory_county.aspx

Alabama Department of Revenue                                           http://revenue.alabama.gov/advalorem/countyoffices/

Alabama Secretary of State                                                               http://www.sos.alabama.gov/

Alabama Bar Association                                                                    http://www.alabar.org/

The Huntsville Times (al.com)                                                          http://www.al.com/huntsvilletimes/

Alabama Department of Education                                             http://www.alsde.edu/home/Default.aspx

State of Alabama                                                                                      http://www.alabama.gov/portal/index.jsp

GOVERNMENT SITES

Department of Housing & Urban Development                                    http://portal.hud.gov/hudportal/HUD

Consumer Financial Protection Bureau                                                      http://www.consumerfinance.gov/

FDIC                                                                                                                    http://www.fdic.gov/index.html

Internal Revenue Service                                                                    http://www.irs.gov/

Office of the Federal Register                                                           http://www.ofr.gov/Default.aspx

Bureau of Consumer Protection                                                                       http://business.ftc.gov/

National Association of Credit Union Service Organizations        https://www.nacuso.org/

Fannie Mae                                                                                                   http://www.fanniemae.com/portal/index.html

Freddie Mac                                                                                                 http://www.fanniemae.com/portal/index.html

Ginnie Mae                                                                                                   http://www.ginniemae.gov/pages/default.aspx

VA Home Loan Program                                                                                          http://www.benefits.va.gov/homeloans/

Bankrate (includes mortgage & loan calculators)                               http://www.bankrate.com/

The White House                                                                                      http://www.whitehouse.gov/

United States Senate                                                                             http://www.senate.gov/

United States House of Representatives                                                   http://www.house.gov/

INDUSTRY GROUPS & ASSOCIATIONS

First American Title Insurance Company                                                   http://www.firstam.com/title/al/

American Land Title Association                                                                     http://www.alta.org/

Dixie Land Title Association                                                              http://www.dlta.net/

National Association of Independent Land Title Agents                 http://nailta.org/

National Mortgage Bankers Association                                                    http://www.mbaa.org/default.htm

National Association of Real Estate Investment Trusts                   http://www.reit.com/Default.aspx

PUBLICATIONS & OTHER RESOURCES

Realtor.com                                                                                                 http://www.realtor.com/

Zillow                                                                                                                http://www.zillow.com/

National Mortgage News                                                                    http://www.nationalmortgagenews.com/

The Legal Description                                        http://www.thelegaldescription.com/TLD/thelegaldescription.aspx

The Title Report                                                                           http://www.thetitlereport.com/TTR/thetitlereport.aspx

FOR HOMEBUYERS

ALTA Homeclosing 101                                                                          http://www.homeclosing101.org/links.cfm

Fannie Mae – Know Your Options                                                   http://knowyouroptions.com/

Equifax                                                                                                             http://www.equifax.com/home/en_us

Experian                                                                                                          http://www.experian.com/

TransUnion                                                                                                   http://www.transunion.com/

Sperling’s Best Places to Live                                                           http://www.bestplaces.net/

Moving Resources                                                                                    http://www.moving.com/

Health Insurance Marketplace                                                                         https://www.healthcare.gov/