TABLE OF CONTENTS

    Being a property owner comes with many responsibilities and documents. One concept people misunderstand is the house title.

    A house title is the legal notion of property ownership and signifies the bundle of rights associated with a piece of property. Unlike the deed, the house title isn’t a document. Instead, it’s a concept that encapsulates the various privileges of owning property, with rights spanning from possessions to the use of the property.

    Understanding the role of a house title is crucial for homeowners because it confirms the legitimate ownership of your home. A clear title ensures you own the property, freeing you from disputes or claims by others, and can impact future transactions, refinancing, and even inheritance.

    Keep reading to learn more about your title of property and what it means.

    KEY TAKEAWAYS

    • A home title is the legal concept of property ownership, but it’s not a physical document.
    • The components of a house title include ownership history, property liens, easements, and other restrictions and conditions.
    • Ensuring a clear title is crucial for seamless property transactions and avoiding legal issues.

    What Is a House Title?

    A house title is a legal concept that denotes the rights of ownership to a property. It’s not a physical document, but it represents the legal ownership of your home and your right to use, sell, lease, or control the property. The documentation that confirms these rights and the record of ownership is called the house deed.

    When you “hold the house title,” it means you legally own it. Then, when you sell your home, the title is transferred to the buyer.

    Since the title for a home is a concept rather than a legal document, several elements come together to form this notion. Components of a house title include the following:

    • Ownership history: This traces the property ownership throughout time to ensure a clear understanding of who has had ownership over the years.
    • Property liens: Liens are legal claims against a property due to unpaid debts like mortgages or taxes.
    • Easements: These are rights given to other parties to use portions of the property in a specific way, such as a city utility company having access to part of the yard for maintenance.
    • Restrictions and conditions: Restrictions and conditions might be stipulated by the homeowner association (HOA) or local regulations, dictating what can or can’t be done with the property. For instance, your HOA might restrict you from using your home as a vacation rental.

    Why Is a Home Title Important?

    The main purpose of a mortgage title is to define the ownership of a property. Having a clear title means there are no liens on the property or ownership disputes, so no other entity or person has a valid claim on it.

    A home title ensures a smooth transaction when selling your house. Having a clear title is crucial when selling a property or using it as collateral for a loan. Financial institutions or potential buyers want assurance that there are no hidden claims or issues with the property, so a home title free from disputes provides smooth and efficient transactions.

    The house title also establishes the owner’s bundle of rights. The bundle of rights includes the various rights a property owner has in terms of how they use the property and encompasses the following:

    • Right of possession: The right of possession indicates that the home belongs to you.
    • Right of control: As the owner, you can control the use of the property within legal limits.
    • Right of exclusion: This allows you to decide who can and can’t access your property.
    • Right of enjoyment: The right of enjoyment ensures you can legally use the property in any way as long as it doesn’t violate the law.
    • Right of disposition: The authority to sell, lease, or transfer ownership to someone else.

    What’s the Difference Between a House Title and a Deed?

    The deed is the legal document proving ownership of a house or property. While house title and deed are often used interchangeably, one is a physical document, while the other is a concept.

    The house title represents ownership and the legal relationship the owner has with the property. It embodies the bundle of rights associated with the property and reflects the ownership status. The ownership status can be clear, meaning it’s free from liens or legal questions where disputes, easements, or other issues might occur.

    On the other hand, the deed is a tangible, legal document that transfers the title of a property from one person to another, effectively repositioning rights to that property. After the transfer, the deed is recorded at a local government agency, like the county recorder’s office, to provide public notice of the change in ownership.

    How to Hold a Home Title

    How you hold a home title can have various implications on ownership rights, financial liabilities, and inheritance scenarios. Different methods of title-holding cater to varying individual needs and circumstances, so understanding each can help you make a more informed decision.

    The common ways to hold a house title include the following:

    Sole ownership

    Solo ownership means a single individual holds the title to the property. This is standard among single individuals who purchased property without co-owners. In this arrangement, the sole owner has complete discretion and control over the home, including its usage and sale.

    If the owner passes away, the property passes to their heirs or beneficiaries depending on the will or state laws if no will exists.

    Tenancy in common

    Tenancy in common is a type of ownership where multiple parties hold the house title. Each tenant in common owns a fraction of the property, which can be equal or not. The main advantage of this method is that co-owners can sell, lease, or will their share independently without the consent of the other owners.

    Joint tenancy

    In joint tenancy, two or more individuals hold the property title with equal ownership interests. Joint tenancy has the right of survivorship in which, if one of the tenants dies, their interest in the property is passed to the surviving joint tenant rather than their heirs or beneficiaries.

    This arrangement is common among spouses and close relatives who want to ensure the property remains within a certain ownership circle if they pass away.

    Tenants by entirety

    Tenants by entirety is a specific form of joint tenancy exclusive to married couples in some jurisdictions. Like joint tenancy, it includes the right of survivorship. However, neither party can sell, give away, or transfer their interest without the consent of the other.

    This method provides an additional layer of protection to spouses, ensuring that one person’s decisions don’t affect the other.

    Older couple estate planning to protect their house title.

    Living trust

    Holding a title through a living trust means that the trust owns the property. An appointed trustee manages the property on behalf of the beneficiaries. This arrangement offers benefits like avoiding probate to distribute the deceased person’s assets. However, the terms of the trust dictate how the property is managed.

    Community property

    Community property is a form of ownership limited to certain states where property acquired during a marriage becomes jointly owned regardless of whose name is on the deed or who paid for it. In this method, each spouse has a 50% interest in the community property.

    In the event of divorce or death, how the property is divided differs based on state laws and pre-existing agreements like prenuptial arrangements.

    How to Protect Your Property Title

    Protecting your property title protects your investment and ensures peace of mind. A clear title solidifies your ownership rights and helps prevent potential legal and financial complications later on. This is particularly important if you’re considering financing options such as a reverse mortgage, where the homeowner borrows money against the value of their home.

    Here are a few ways you can protect your property title:

    • Invest in title insurance: Title insurance is the easiest way to protect against title defects or liens that didn’t show up during the title search as part of the mortgage underwriting process. With a one-time fee, you can purchase this insurance as part of your closing costs when purchasing a home to protect yourself from future claims.
    • Perform regular title searches: Periodically performing title searches can uncover issues like liens or easements that might have been placed against your property.
    • Beware of title fraud: Regularly monitor property records to ensure there are no unauthorized charges or transfers. If you suspect fraud, contact the authorities and your title insurance company.
    • Use reputable escrow services: When buying or selling property, ensure the escrow service or title company has a good reputation to ensure the title transfers correctly.
    • Understand property taxes: Unpaid property taxes can result in liens against your title. Ensure you’re up to date on all tax obligations and keep detailed records of payments.

    How to Change Your Home Title

    You’ll need to prepare a new deed to change a home title. The current title holder must create and sign the new deed to transfer the property to a new owner. The deed should be signed in front of a notary public to verify the identity of the signers and ensure they’re signing the document willingly. Then, the deed can be recorded at the local county recorder’s office or courthouse to provide public notice of the change in ownership.

    There are several instances when someone might need to update or change their home title. For instance, an updated deed is required if you get married and want to add your spouse to the title or if you get divorced and wish to remove them.

    Additionally, if the title holder passes away, the title must be updated to reflect the surviving owners. You can also revise the title to add or remove someone, such as a child.

    Once you’ve satisfied your mortgage and it’s fully paid off, the lender’s lien is removed, requiring an updated deed.

    The Power of Home Titles

    Home titles represent the legal ownership rights to a property. Protecting your title through insurance or regular title checks safeguards your ownership and future property transactions. However, certain life events and other circumstances might require you to update your home title and deed.

    At Griffin Funding, we recognize the significance of home titles in your journey to homeownership. We can help ensure your property’s title remains clear and protects your ownership rights. Apply for a mortgage online today or learn more about our mortgage programs by calling us to discuss your unique situation.

    Frequently Asked Questions

    How do you get a copy of a house title?

    A house title isn’t a physical document, so you can’t get a copy. However, you can get a copy of your deed. To get this document, you can visit the county recorder’s office website where the property is located and search using the property’s address or owner’s name. Some counties offer online databases, making this process more convenient.

    Why does the type of house title you hold matter?

    The type of home title you hold dictates your legal rights and obligations concerning the property. It determines how that ownership is shared with others, how decisions are made, and what happens if an owner passes away.

    What does a house title look like?

    A house title doesn’t look like anything because it’s not a physical document like a deed. Instead, it’s a legal concept indicating the ownership rights to a property. The tangible representation of the title is called a deed and provides information on the property, owners' names, and the property's legal description.
    Bill Lyons

    Bill Lyons is the Founder, CEO & President of Griffin Funding. Founded in 2013, Griffin Funding is a national boutique mortgage lender focusing on delivering 5-star service to its clients. Mr. Lyons has 22 years of experience in the mortgage business. Lyons is seen as an industry leader and expert in real estate finance. Lyons has been featured in Forbes, Inc., Wall Street Journal, HousingWire, and more. As a member of the Mortgage Bankers Association, Lyons is able to keep up with important changes in the industry to deliver the most value to Griffin's clients. Under Lyons' leadership, Griffin Funding has made the Inc. 5000 fastest-growing companies list five times in its 10 years in business.