What role does a title company serve in the mortgage process?

A title company plays a crucial role in the mortgage process by ensuring that the transfer of the property title is clear and legally valid. This involves conducting a thorough examination of public records to verify that the seller has the right to sell the property and that there are no outstanding liens or encumbrances that could affect the new owner's rights. This process helps to protect both the buyer and the lender from potential legal issues related to the property title.

In addition to verifying the title, title companies often provide title insurance. This insurance protects against any claims or legal challenges that may arise in the future concerning ownership of the property. By ensuring a clear title transfer, title companies help facilitate a smooth transaction, allowing buyers to proceed with confidence in their new property.