WHAT IS LENDER’S TITLE INSURANCE?

When you obtain a mortgage, the property you purchase is pledged as security for the loan. To protect against risk, the lender requires assurance that the title to the property is clear, and this is done through a loan policy of title insurance.

WHAT IS OWNER’S TITLE INSURANCE?

An owner’s policy of title insurance is a contract that protects you, according to the contract terms, against loss or damage due to title defects. This contract is backed by the known assets and reserves of the title insurance underwriter and serves as a written guarantee that your underwriter will undertake, at its own expense, the defense of your title in all legal actions or proceedings alleging the title to be other than as insured. For a one-time premium, paid during the closing process, an owner’s policy of title insurance protects against future losses arising out of events that may have happened in the past. In most cases, an owner’s policy can be issued at the same time as the loan policy, usually for a nominal one-time fee.

CAN I DECLINE HAVING TITLE INSURANCE?

Yes and no. While the lender will likely require a loan policy of title insurance, the purchaser can choose what type of owner’s protection, if any, to use with regard to title. It’s important to remember, however, that only title insurance protects the owner against hidden hazards, and only title insurance reimburses the owner for legal expenses for defense of claims that affect the value of the property.

HOW MUCH WILL IT COST ME FOR SETTLEMENT?

Our closing fees are very reasonable. Your total closing costs depend on various conditions. For example, if you are using a lender, you will have their closing fees included on your settlement statement. Our fees include the Settlement Fee, Title Search Examination, Document Preparation, Administration Fee, Courier Fee, fee for Lender’s Title Insurance and/or Owner’s Title Insurance if required or requested. Please contact our office for a quote of fees for your particular situation.

WHAT IF I CAN NOT ATTEND THE SETTLEMENT?

We can do what is called a “mail away” settlement. As long as your lender agrees, we can express mail your loan documents for you to sign in front of a notary. We include an express envelope so all you have to do is drop the package in the box once the documents have been signed and notarized. The same goes if you are the Seller. Although we always advise that you be here for settlement, sometimes life has a different schedule. You can have your settlement even if you’re out of the country!

CAN I SCHEDULE MY SETTLEMENT ON A SATURDAY?

D. Stephen Parsons, P.A. would be happy to schedule your settlement on a Saturday. We are one of the few law firms in Sussex County that conducts Saturday settlements.

WHAT IS TENANTS IN COMMON?

The law presumes tenants in common unless the deed you receive specifies otherwise. If one owner dies the property passes to his heirs, not necessarily the survivor. If there is a Will, it controls. Persons who are not married or related usually use tenants in common.

WHAT IS JOINT TENANTS WITH RIGHT OF SURVIVORSHIP?

This type of ownership applies to both personal property – furniture, cars, boats, bank accounts, CD’s – and to real property – homes, buildings and land. It means that, if one of the joint tenants dies, his share, by operation of law, goes to the other joint tenants who survive him. If you want to create a joint tenancy with right of survivorship in Delaware, you must specify in the document creating the parties’ ownership in the property that the owners are joint tenants with right of survivorship. Joint tenancy with right of survivorship is not a way to avoid paying taxes. Federal estate taxes and state inheritance taxes must still be paid on interests received by survivorship in joint tenancy with right of survivorship. Before you make up your mind, you should talk to us and we can advise you in deciding which form of ownership is best for your needs.

WHAT IS TENANTS BY THE ENTIRETY?

This method of ownership is substantially similar to Joint Tenants With Right of Survivorship, but can only be used by a husband and wife who reside in a common law jurisdiction (state).

WHAT IS MEANT BY “RIGHT OF RESCISSION” AND/OR “RIGHT TO CANCEL?

When you borrow money to purchase or refinance your primary residence, a “right of rescission” document is included with your loan package. This document says you have the right, within three business days, to rescind (cancel) the transaction. So in other words, you come to the settlement table, sign all your documents, and within three business days decide you don’t want to go through with it, you can cancel the deal. This applies only to loans for your primary residence, not second homes.

WHAT IS AN LLC?

A limited liability company (denoted by L.L.C. or LLC in the US) is a legal form of business company offering limited liability to its owners. It is similar to a corporation, and is often a more flexible form of ownership, especially suitable for smaller companies with restricted numbers of owners. It is often incorrectly called a “limited liability corporation,” (instead of company). In fact, an LLC is more a status than it is an entity, as it can be taxed like a partnership or corporation, depending on how its members, partners, or shareholders file its first taxes.

WHAT IS AN S-CORP?

In the United States, an S Corporation or “S-Corp” is a form of corporation that meets the IRS requirements to be taxed under Subchapter S of the Internal Revenue Code.

Unlike a regular C corporation, an S Corporation generally pays no corporate income taxes on its profits. Instead, the shareholders in the S corporation pay income taxes on their proportionate shares, called distributive shares, of the S corporation’s profits. Shareholders pay the tax regardless of whether the S corporation pays out money or not. The FICA tax need only be paid on employee income and not on profit distributions. Additionally, employees must be paid a reasonable wage for their position within the company to avoid any potential tax implications.

WHY CHOOSE D. STEPHEN PARSONS, P.A.?
  • Unmatched experience, dedication & support to help you through the legal process.
  • Over 100 years of combined experience in real estate settlements – 40,000 settlements and counting!
  • Saturday settlements available.
  • Knowledgable staff with years of experience.

Close

Your browser is out-of-date!

Update your browser to view this website correctly.

Get More Information