In today’s rapidly changing mortgage sector, having a full picture of a prospective borrower’s title is one of the most important steps a lender must take at loan application. It’s critical to ensure the title of the subject property is free and clear of any liens or encumbrances that could delay or prevent the loan from being completed. This is why title checks are an important part of the loan origination process; it ensures the borrower’s title is free and clear and allows lenders to identify any potential liens or encumbrances to the property.

The purpose of obtaining a title check at loan application is to provide lenders with a comprehensive view of all risks associated with providing the loan. It allows them to identify any liens, encumbrances or other transactions that could present a potential threat to the property or lender. A title check can also alert lenders to any property disputes or pending lawsuits that could delay or disrupt the loan process. A title check can give lenders the confidence and assurance they need to move forward with the loan.

During the loan application process, title searches can be done in many ways, including through title companies or the county record office. A title company can provide a comprehensive, in-depth search of the public records, while a county record search will only provide basic information. Additionally, some lenders may request a title insurance policy to ensure that, regardless of the results of the title check, the lender is covered in the event of any problems that arise with the loan.

Lenders must ensure that a title check is part of their loan application process to identify any potential risks and ensure the clear title of the subject property. Having a full picture of the borrower’s title is essential to making sure the loan process progresses without incident, and that the lender is adequately protected. Through the use of title checks and title insurance, lenders can avoid or minimize any potential delays or disruptions to the loan process and provide peace of mind for their borrowers.

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