Why You Should Use a Title Company for Second Home Loans: 5 Reasons to Ensure a Convenient Process

Founded in 2019 and launched in 2020, New Door Property Transfer helps real estate leaders open their own title agencies. Founder and CEO Alex Lopez got his real estate license in 2016 and created the Homeway Real Estate brokerage almost instantly thereafter, but noticed an industry trend that called for New Door and its services.

New Door Property Transfer empowers real estate companies to open their own title companies, providing an opportunity to earn more profits on extra services. Title companies are neutral third parties that manage the closing process of your home. We sat down with Lopez to learn why it is so important to use a title company when refinancing your home.

Without further ado, here are five reasons using a title insurance company is useful for refinancing your home.

Lender Approval

When refinancing, your lender will need assurance that your home doesn’t have any liens on it. A lien is “a right to keep possession of property belonging to another person until a debt owed by that person is discharged,” according to the Oxford Dictionary.

The lender will need proof that you (the loan applicant) are the legal owner of your home. Title companies do background research to ensure this is the truth, providing the needed information to your lender, including anything they may find valuable.

Even if you use the same lender that assisted with your initial home sale, they will still want to verify this information — essentially, whether the ownership changed from then to now.

By using a title company to compile the necessary information, you avoid being denied for a second loan. If you have some baggage, such as a judgment filed against you, it is better to tell your lender up front via the title company. Many lenders will require you to pay the judgment before approving you for a refinancing.

Title Ownership Verification

You need to make sure your property is free and clear, and one of the ways to do this is to confirm who owns the property. Seems obvious, but you’d be surprised!

Lenders will need you to conduct a second search anyway, so you need to use a title company for that to verify proof of ownership. They will explore public records for you, confirm the ownership, and use their industry expertise to gain serious paperwork for you.

At its bare bones, rifling through public records is tedious, which is why Lopez recommends using a title company.

Pay Out Finances

Occasionally, title companies help pay out finances, such as when settlement statements comprise extra individuals or entities that need to be paid.

When these occasions arise, the title company gets the loan, instead of the loan applicant, and the title company does the work of doling out the money. This can be especially useful if you are dealing with a multi-person loan or need help organizing finances in general. The title company will do all of this for you, you just tell them how to distribute the funds.

Function as a Middleman

“Communication at its best, with close friends, is still time consuming,” said Lopez. “Communication about money with practical strangers can be exhausting, overwhelming, confusing, and stressful. Title companies like New Door Property Transfer acts as a liaison between you and your lender, taking that little bit of stress off your shoulders.”

Ensuring that you don’t miss any messages, understand all paperwork, and use your time efficiently is at the useful hands of a title company when you employ one.

Lenders, loan applicants (that’s you!), lawyers, surveyors, public records holders, and any involved government officials can communicate through the third party that is your title company. So much easier!

Drawing Up a Settlement Statement

Finally, title companies assist loan applicants with the closing of their home. They can prepare settlement statements for lenders, help lenders come to agreements with loan applicants, and explain on a micro level how money will be dispersed, used, and organized during the duration of the loan.

In closing, if you are thinking about refinancing your home, using a title company will definitely be a convenient addition to your process. They can be a huge help, and either make you feel like the world is lifted off your shoulders or like you are getting the luxury experience.

About New Door Property

New Door Property Transfer provides smooth home property title transfers and closing services for consumers, lenders and investors. The company was founded in 2019 by Alex Lopez, CEO of Homeway Real Estate. For more information please visit https://www.newdoorpt.com/

LA Weekly