Illinois Title Company
If you are buying a new home, you likely have been told that you will need to work with an Illinois title company during the purchase process. Unless you have purchased property before, you may be unsure exactly what it is the title company will do and why you need one.
What Is a Title
Every piece of property has a deed and a title. Some people think those two items are the same thing, but they are very different. The deed to a property is an official document that states an individual’s legal ownership of that property. The title to the property refers to the rights of the owner to the property, such as the right to sell the property. There is no physical document like a deed.
The role of an Illinois title company is to ensure that the title to a property is legitimate, and the owner of the property has the right to sell to the buyer. When the title company establishes that, they will then issue title insurance. This insurance provides protection to the mortgage holder (or the owner) against any lawsuits or claims that may arise due to title disputes.
In order to establish the current owner’s title is legitimate, the title company will conduct an extensive search of all property records to confirm ownership and make sure that there is no other party that could claim full or partial ownership to the property.
In addition to ownership, the title company also looks to see if there are any outstanding mortgages, unpaid property taxes, liens, judgments, easement, leases, or any other restrictions that could have an impact on ownership rights. It is also common for the title company to require a survey of the property be done by a professional to determine property boundaries to make sure the structure is within those boundaries, and whether there are any easements or encroachments.
Once all of this has been completed, the title company will prepare a summary of what it found. This is referred to as an abstract of title. The company will also issue a letter that addresses the title validity. This letter is considered a legal document.
Once that is complete, the company will then issue title insurance. There are two types of title insurance:
- Lender title insurance that protects the financial institution that hold the mortgage
- Owner title insurance that protects the owner
While lender title insurance is mandatory, owner’s title insurance is not, however, it is recommended as protection for the owner should a title claim come up in the future.
Call Our Office for Assistance
If you are purchasing a property and need to find a dedicated Illinois title company, contact Closeline Settlements today.