Certificate of Title
Mortgage Dictionary -> Certificate of Title
When it comes to buying a home or a vehicle and financing is concerned, you're bound to hear a lot of terms that may confuse the heck out of you. One of these is inevitably the Certificate of Title, and yet it's a pretty important thing. Prepare to be educated in this article, as you'll be learning all about the Certificate of Title, what it applies to and how it transfers.
What is the Certificate of Title?
The Certificate of Title is a document that provides the identification of who owns a particular piece of property. In other words, it is a legal document that tells who legally is responsible for and owns the property. It does not state things such as the terms of the loan.
What Does the Certificate of Title Apply to?
The Certificate of Title mainly applies to homes and vehicles, but also can apply to business buildings and anything else that is physical and has a loan against it. This means that you may have a certificate of title for several different things.
Who is Listed on the Certificate of Title in the Case of a Loan?
In the case of a loan, the lender is on the Certificate of Title. The document remains this way until the borrower pays for the loan in full.
When and How Does It Transfer?
The Certificate of Title transfers as soon as the borrower has paid back the entire loan. It is at this time that the property is no longer owned by the lender, but rather, is now owned by the borrower. The Certificate of Title will not transfer any sooner than this.
Why is the Certificate of Title Important?
The Certificate of Title is important for one major reason: it gives you a legal right to the property. Without it, you have no legal backing for owning the property, and are at the mercy of the person or lender who is on the Certificate of Title.