You don’t have control over a few components in the mortgage approval process, one of which is the title search. All mortgage companies require a clear title before they will clear your loan to close. But just how long does the title search take?
Typically, the process takes two weeks, but each situation differs. The title company you use, their current workload, and the complexity of the search play a role in how long it takes.
What is a Title Search?
It helps to understand what goes on during a title search to see what takes so long. Title examiners search and examine the title of the property. In other words, they go through the public records to determine who owns the property. They look at the chain of title to make sure that the property exchanged hands legally each time it transferred to a new owner.
The examiner also looks for defects on the title including:
Mortgage companies require a clear title, so finding any liens or levies could cause a delay in mortgage processing.
Title professionals can usually provide a complete title search within two weeks, but if the examiner has trouble finding the information or there are numerous liens, the process may take longer.
How Long Does it Take to Clear a Title?
If the title examiner finds liens on the property, your loan officer may try to clear the liens for you. Working with the title agent, the loan officer will find out who owns the lien and try tracing it to determine if the lien has been satisfied already. The title company will need proper documentation showing the proof of payment in order to clear the lien, though. In some cases, this can happen in a matter of days, but sometimes it’s a bit more complex and takes longer.
What is Title Insurance?
Title companies require a title search before they will offer title insurance. The title company needs to know that the home legally transferred to the current owner and doesn’t have any liens before they can provide insurance.
If a title company determines a home is insurable, they will offer two types of insurance:
- Lender’s title insurance
- Owner’s title insurance
If you borrow money to buy the home, lender’s title insurance is a requirement. Lenders require this to protect their interest in the home should someone try to stake a claim in it in the future. You pay a one-time premium for lender’s title insurance and it lasts for the duration of the mortgage, unless you refinance.
Owner’s title insurance protects your interest in the home in the event that someone tries to stake a claim in the home in the future. Owner’s title insurance isn’t required, but we highly recommend it. You can shop around for the best title insurance rates for the policy, but again, it’s a one-time premium.
The title search can seem like yet another delay in the mortgage process, but it’s necessary to protect you and your lender. You don’t want to buy a home that has existing liens on it because those liens become your problem if you buy the home (they transfer with the property). Plan ahead for the time a title search takes and make sure your lender orders the search as soon as possible after you sign a purchase contract for the fastest results.