The title company handles the process of ordering a title commitment and lien search on the specific property that is being financed and making sure it is free of all liens, defects and problems. A lien search is done on the property to insure the property is clear of all liens for the lender that will be lending the money on the property. Whether you are doing a refinance or a purchase a lien search will most likely be done. Consult your local mortgage broker to find a good title company to use.

The title company is an unbiased 3rd party that protects the interests of both the homebuyer (or borrower) and the lender. The title company will perform a thorough search of the property's history to make sure there are no breaks in the chain of title. In other words, the title company will link sellers and buyers from the beginning of time (theoretically) to present day. This linking of sellers to buyers is why it is called a "chain" of title. If there is a missing link in that chain, the title company will inform all parties of what needs to be done to fix the missing link. Once all links are in place and all olds liens are released, they will issue a policy to the new homeowner insuring that they have marketable title to the real estate. They also insure that the mortgage lender has a valid lien on the real property in the form of a mortgage.

Title & Escrow Fees - Title & Escrow Fees
Include both the owners and the lenders policy of title insurance as well as the escrow fee. Title insurance protects both the buyer and lender by insuring a clear chain of title, that the persons with the legal right to convey title to your property are the ones who have actually done so. Also, some polices protect against the occurrence of fraud and forgery.

The escrow fee is a service fee charged by the title company for acting as an independent third party in facilitating your transaction and insuring that all parties to the transaction perform as contractually agreed to.

Other title fees include the fee to notarize your loan documents (the notary fee) the fee required to record your deed of trust with the county recorders office (the recording fee), as well as miscellaneous drawing, courier and express mail fees.

You may call the title company handling your purchase, provide them with the purchase price and loan amount youre requesting and they can supply you with an accurate fee quote based on the specifics of your transaction.
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For Borrowers: Usually taxes and insurance effect the final numbers on a HUD-1 more than any other one item. Taxes are given in the title report which is furnished by the title company you are using. Insurance premiums can change based on the amount of coverage requested by the lender. From time to time the estimates used on a Good Faith Estimate will be significantly wrong until the Loan Officer gets both the title and the insurance binder in thier hands and then they have final numbers for the closing.

Borrower's have a right to shop around and select the escrow and title insurance providers. Borrower's seldom do this however so in most cases the real estate agents or the loan officers select these service providers. The realty agent and loan officer will usually prefer to work with an escrow company that they are familiar with for a smoother transaction.

Most title and escrow companies charge the same fees. Some states require them to submit what their fees are to the Division of Insurance and they can not deviate from that set fee unless it is less.

Your total fees for both title and escrow will be disclosed on your HUD-1 statement.

Title and escrow fees come into play when the seller accepts a buyer's offer and both the parties "open escrow" with a title or escrow company or attorney.

An escrow account holder is a neutral third party which holds onto, then exchanges, disburses and transfers deeds, documents and monies. Disbursements pay off existing loans and the agent records deeds, prorates property tax payments and interest and helps with the transaction's other transfer details.

Most of the money associated with a home purchase is channeled through the escrow account including a buyer's deposit, fees for the escrow account itself and related services, title insurance and title search fees, the mortgage money and associated fees, the real estate agent's commission, recording fees, filing fees, transfer fees, notary fees, courier fees and a host of others.

All these costs become "settlement costs" recorded on the U.S. Department of Housing and Urban Development's HUD-1 "Settlement Statement" or a reasonable facsimile, which discloses all of a housing transaction's costs for both the buyer and the seller.

These fees is not marked up by your mortgage broker and your mortgage broker is not allowed by law to make a profit off of these 3rd party fees.