Title insurance, like real estate and the mortgage industry, has its own terminology. And while you should rely on the professional team you have assembled to help guide you through your property transaction; you‘ll want a basic grasp of the more common title insurance terms. So, here is a list of frequently used terms. It’s by no means exhaustive but should help until you have more time to connect with a title company in New Jersey.
- Abstract of Title
A written summary of all recorded deeds, mortgages, leases, and other instruments affecting the title to a particular piece of land.
American Land Title Association, the national trade association for the title insurance industry. ALTA member companies include businesses conducting your closing and issuing you an Owner’s Policy of Title Insurance.
- Closing or Settlement
Completing a real estate transaction during which deeds, mortgages, leases, and other required instruments are signed and delivered. Money is disbursed, papers are recorded, and all other details such as payment of outstanding liens and transfer of hazard insurance policies are completed.
- Closing Statement or CD (Closing Disclosure)
A summation of debits and credits each party in the real estate transaction are responsible for.
It’s important to understand the difference between a deed and a title. A deed is a written document that conveys (transfers) the title to real estate from one party to another.
A right held by a person to make limited use of another’s real property. Think of an access road allowing you to cross a person’s property to get to your own.
A claim, right, or lien on a real estate title held by someone other than the real estate owner. It’s important to note that there are several types of title encumbrances which the team at an experienced title insurance agency will help you to understand.
An escrow is depositing anything specific to a real estate transaction, including money and documents, with an impartial third party (typically a title company). The money and documents are to be disbursed and delivered to the appropriate parties by the title company when all transaction conditions have been met.
- Insurance Endorsement
A title insurance Endorsement is an amendment to the policy’s base coverage. Endorsements commonly expand base coverage rather than restricting it. A coverage restriction would typically reduce coverage from the base policy.
A lien is attached to a property when a person borrows money and uses that property as collateral to guarantee the loan. The lien is removed when the loan is paid off.
New Jersey Land Title Institute, the trade association for the New Jersey title insurance industry.
- Title Insurance
Insurance that protects buyers and lenders against loss from defective titles, liens, and encumbrances.
- Title search
A search of the public records for issues that affect the title to a particular piece of land.
The rights of ownership are recognized and protected by the law.
- Title Defect
A defective title is one with an encumbrance which is any possible claim or right outstanding in the title that may prevent the current owner from transferring the title to a new owner. Until the issues are resolved to the satisfaction of all parties involved, the title may not be transferred.
If you need additional information regarding your New Jersey title questions, get in touch with us today! Our knowledgeable and experienced team is ready to help you with your title every step of the way. Let our knowledge and experience be your guide as we walk you through the process from start to finish.