As a mortgage lender, you’re probably aware of the importance of accurate title searches in the loan approval process. They provide you with information about who owns the property, what encumbrances exist, and whether there are any liens on the title.

Title searches can also alert you to potential problems, such as pre-existing arrangements or debts, that would impact the closing of the mortgage loan. Keep reading to learn more about the steps involved in a title search, so you can discover all the potential issues with a property before you approve a mortgage request.

 

Identify the Property and Locate the Deeds

When performing a title search, you first need to find as much information as possible about the property and its current owner. One way to do this is by going through the property’s current and previous deeds, surveys, and official records of ownership.

Deeds are typically found in the county clerk’s office, while property surveys are kept in the deed book. In most cases, you can access the deeds online through your state government’s website. This is the fastest way to do a title search. All you need to do is visit the local government website, type in your county, and then look for the property title you’re interested in.

If you can’t find the records online or if the digital deed search system does not go far back enough in the past for your purposes, visit the local recorder’s office of the area the property is located in.

 

Establish a Clear Chain of Title

Now that you have access to all the deeds, you should be able to check if the ownership of the property was passed on to the current owners correctly. You will also need to verify the previous property owners, all the way back to the original owner, and establish a clear chain of title. Properties with a break in the chain of title can pose risks in the future.

To do this, start with the most recent deed and work your way back. Check to ensure that the seller in the current deed was the buyer in the previous one. File this information in a chart to get a clearer picture of if there are any gaps in ownership, which could potentially impact the current owner’s right to sell the property.

 

Look up Tax Records

You need to check the tax records to get a more accurate idea of the property and ensure there are no unpaid or overdue taxes. Unpaid taxes can lead to a lien being placed on the property, which means that government can put it up for sale at any time. So it’s important to visit the county’s tax assessor’s office and look for tax records to ensure there are no liens on the property you’re investing in.

Moreover, tax histories can provide an accurate evaluation of the property’s value over time, helping you determine the property’s current fair market value.

 

Hire a Professional Title Search Company

Compiling your own title search can be a complicated process. Moreover, mistakes in the title search process can result in expensive losses down the road. By outsourcing your mortgage title search services to a professional title search company, like Real Title Services, you can avoid major pitfalls and save time and money.

 

Get in touch with us today at (213) 375-1726 or contact us via our website to learn more about how we can help you with the title search process.