What is the purpose of a title search in the mortgage process?

The purpose of a title search in the mortgage process is to examine public records for ownership and liens. This step is crucial because it verifies the legal ownership of the property and ensures that there are no existing claims, such as liens or unpaid debts, against the property that could affect the buyer's ownership or the lender's security interest. By conducting a title search, parties involved can identify any encumbrances that might pose risks, ensuring that the title to the property is clear and marketable before the mortgage loan is finalized.

Accurate ownership information is vital for preventing legal disputes in the future, which can arise if hidden claims or disputes concerning ownership are discovered after the sale. The title search ultimately helps protect both the buyer and the lender from potential financial loss.