Get to Know Your Homebuying Team: Part Four

Title Company, Loan Servicing Company, Insurance Provider

Like many big goals, purchasing a home requires teamwork. A whole network of industry professionals is involved in the process to connect the homebuyer to the right loan for their unique financial circumstances, help them find that dream home and make sure that the home is safe and affordable.

Get to know a few of the key players below and read previous installments in this series for information on the rest of the homebuying team.

• Part One: Lenders, Real Estate Licensees, and Home Inspectors
• Part Two: Appraisers, Contractors and Energy Raters
• Part Three: Underwriters, Investors and Guarantee Agencies

Some of these professionals will become familiar faces throughout the homebuying process while others work behind the scenes to make your home purchase happen.

Title Company

A title company plays an important role in the closing process by researching the property title – the legal right of ownership over the property. As a neutral third party in the homebuying process, the title company evaluates the title to make sure it is “clean” (free of disputes and liens) and that the seller actually has the legal right to sell the home.

The title company also handles the closing process – the official transfer of ownership. The title company agent ensures that closing documents are signed and notarized and that funds are distributed correctly.

Loan Servicing Company

The loan servicer is the primary point of contact for homeowners after the transaction is complete. The servicer takes care of the routine administrative tasks for home loans. They are the company you send your monthly mortgage payment to and the ones you contact if you have questions, spot an error on your billing or need to discuss options during financial hardships.

It’s normal for the loan servicing company you end up working with to be different from the lending company you used during your home purchase.

Insurance Provider

You finally purchased a home – now it’s time to protect it!

Mortgage lenders almost always require borrowers to take out homeowners insurance, with policy coverage up to the cost of rebuilding the home. Additional coverage for flooding or earthquake damage may also be required. In addition to providing peace of mind in the event of damage to the property, homeowners insurance provides liability coverage in the event that someone is injured on your property.

Homeowners insurance is different from mortgage insurance, which protects the mortgage lender if the homeowner defaults on their loan. Mortgage insurance is usually a separate policy and is typically only required if the buyer made a down payment of less than 20 percent. Homeowners may decide to refinance their loan down the road, in order to eliminate the requirement for private mortgage insurance.

Learn More

There’s a lot more to learn in HomeChoice™: Steps to Homeownership! Sign up for the no-cost homebuyer education class to learn more about the terminology you’ll encounter during the homebuying process