Frequently Asked Questions

The most asked question of all - what exactly is title insurance? Title insurance insures against financial loss caused by defects in title to real estate. Title insurance companies defend against lawsuits attacking the title, or in the case of a covered loss, reimburse the insured up to the policy limit. Check out this link to the Texas Department of Insurance website to become more familiar with title insurance. 

As a title insurance company, we serve as the conduit to both help facilitate the closing of the real estate transaction and act as a neutral escrow agent to hold and distribute monetary funds. Red River County Abstract does not represent either party during a transaction, instead we act as a neutral third party. 

While the state of Texas does not require title insurance, your lender will require you to buy a Loan Policy of Title Insurance as a condition of the mortgage to protect their interest.  A loan policy will last until the loan is paid off. However, an owner’s policy lasts as long as you or your heirs own the land. Check out the horror stories of these buyers who didn't use a title company at the bottom of this link!

No, title insurance is different from other types of insurance. It does not insure against fire, flood, theft, or any other type of property damage or loss. It protects against losses from ownership problems that arose before you bought the property, but were not known at the time you bought the property. It does not guarantee that you will be able to sell your property, or borrow money on it. There are many great insurance providers in our area if you are looking for homeowners insurance.

Yes. Title insurance rates in Texas are regulated. All title companies will charge the same premium for a policy. Rates are based on the property’s sale value. For example, the basic premium for a $50,000 property is $496, and the basic premium for a $100,000 property is $832.

You should always buy from a licensed company - like us, Red River County Abstract! If you buy from an unlicensed company, your claims could go unpaid. You may choose any title company you wish to serve you; you don’t have to use a company selected by a real estate agent, builder, or lender. We guarantee a responsive and superior real estate service experience. Additionally, we aim to treat each transaction with integrity, care, and professionalism! We hope to have the opportunity to provide our services to you!

The title commitment comes before closing; the title policy is issued after closing. The commitment says that a title company is willing to issue title insurance under certain conditions and if the seller fixes certain problems. The policy provides coverage for the property. 

The title commitment lists any potential issues, exclusions, or exceptions. It alerts the buyer to issues that exist and could cause problems in the future. It does not guarantee that there are no current issues or that none will arise in the future. You should discuss how to clear potential issues with a title agent in our office. Read the title commitment carefully as these items can become exclusions or exceptions under Schedule B of your policy. Exceptions and exclusions are items not covered by the policy.

Most lenders will require you to buy a new loan policy if you refinance your home. If you refinance within eight years you can receive a discount of the premium! The premium discount varies, based on the number of years since your current loan began. If your current loan was within four years of your new loan, you get a 50% discount on the basic premium. If your current loan was between four and eight years before the new loan, you get a 25% discount. After eight years, you do not get a discount.

There are many steps in the home buying process. We've found this article from Nerd Wallet to be very insightful and accurate. If you are a first time buyer, please check out this resource. We highly recommend it.