What is a Title Commitment? Why Do I Need One? When Do I Get?
Hello and welcome to Houston First Time Home Buyers Edition, where we provide useful information to help Houston first time home buyers make the most informed decision when it comes to buying, decorating, and maintaining their first home.
During your home buying process and before your closing take place, you will receive a title commitment from the title company. This commitment is a part of the qualification process to get your mortgage loan. In most case, the seller will be required to furnish the commitment to you. This means the seller typically pay for the policy.
The title commitment is to inform you of any and all requirements that must be met before the title policy can be issued. The commitment offers protection to both buyer and lender if any issues arises about ownership and other problems, against the property.
There four parts to the title commitment that includes schedule A, schedule B, Schedule C and schedule D.
Schedule A includes actual facts, such as the effective date of the title commitment, the name of the buyers and lender, the estate or interest in the land to be insured, the sale price of the property, loan amount, and the legal description of the property. You and your Realtor, should proofread this section for any errors.
Schedule B is the buyer be aware section, that informs the buyers that the property taxes (valorem taxes) are paid and current, as well as the policy limits, all recorded deed restrictions, liens, standby fees, mineral reservations, worker’s comp or construction liens, easements, and all other issues.
Schedule C is where you will find all the issues that must be addressed, such as liens, abstracts of judgment, or probate issues, that will all need to be addressed before a title policy can be issued. These issues must usually be addressed by the seller. However, if they are not, these issues could be moved to Schedule B and become the buyer’s responsibility. So, you and your Realtor should work with the title company to make sure these issues, if any, are in fact taken care.
Schedule D includes full disclosure of all officers of the title company, including the title agents and underwriters. In addition, it also includes the amount of the premium and the beneficiary.
Because title insurance is a very important document for home buyers, understanding the title commitment is of the utmost important. Please make sure to speak with the title company, and or a licensed attorney for clarification and guidance. As always, we thank you for visiting us today. Until next time…Diana
As always, thank you so much for stopping by. Remember, if you are thinking of purchasing your first home, please contact us. We are here to help. We have been helping Houston first time home buyers since 2011 and we can help you. I hope you have an amazing day. Until next time...Diana
