Understanding Title Insurance and Why You Need It When Buying a Home
When buying a home, you will need to obtain title insurance. Title insurance is a type of insurance policy that protects homebuyers and mortgage lenders against any defects or problems with the property’s title. Here’s what you need to know about title insurance and why you need it when buying a home:
What is Title Insurance?
Title insurance is an insurance policy that protects homebuyers and mortgage lenders against any defects or problems with the property’s title. It covers any claims made against the title that arise after the home has been purchased. These claims can include outstanding liens or mortgages, unresolved legal disputes, or errors in the public records.
Why Do You Need Title Insurance?
Title insurance is essential when buying a home because it provides protection against any issues that may arise with the property’s title. Without title insurance, you could be held responsible for any outstanding debts or legal disputes related to the property, even if they existed before you purchased the home. This could result in costly legal fees, loss of the property, or even financial ruin.
How Does Title Insurance Work?
When purchasing title insurance, a title search is conducted to ensure that there are no defects or issues with the property’s title. This includes reviewing public records, deeds, and other legal documents related to the property. If any issues are found, they must be resolved before the title can be insured.
Once the title is deemed clear, the title insurance policy is issued. The cost of title insurance is typically a one-time fee paid at closing, and it varies based on the property’s value and location. The policy remains in effect for as long as you own the property, and it can also protect future buyers if you decide to sell the home.
Types of Title Insurance
There are two types of title insurance: owner’s title insurance and lender’s title insurance. Owner’s title insurance protects the homeowner’s interest in the property and is typically required by mortgage lenders. Lender’s title insurance protects the lender’s interest in the property and is required by most mortgage lenders.
Title insurance is an essential part of the home buying process, and it provides protection against any defects or problems with the property’s title. By obtaining title insurance, you can ensure that you’re protected against any legal or financial issues related to the property’s title. Be sure to work with a reputable title insurance company when purchasing a home to ensure that your investment is protected.
Jason G. Norman, Esq.
© 2023, Norman Legal, PLLC.
All Rights Reserved.