Purchasing property is an exciting life event — but one crucial piece of the real estate transaction that’s frequently overlooked is title insurance.
Title insurance is an important safeguard that provides protection and peace of mind for homeowners; without title insurance, your real estate investment is vulnerable to potential title defects that could result in serious consequences, including loss of your property. Let’s dive into what title insurance is, why it is necessary, and how you can get it.
What Is Title Insurance?
Title insurance protects property owners against potential financial losses due to defects or issues related to the property’s title. These issues could include undiscovered liens, encroachments, errors in public records, or even fraudulently executed documents.
Types of Title Insurance
There are two main kinds of title insurance policies: owner’s title insurance and lender’s title insurance.
- Owner’s title insurance protects the property owner from undiscovered or undisclosed title issues.
- Lender’s title insurance protects a lender’s interest in the property in the case of title issues. Lender’s insurance is typically required for mortgage loan approval.
Title insurance provides coverage for problems that existed before the property was purchased. This makes it notably different from most other types of insurance because it protects against past occurrences rather than future ones.
Importance of Title Insurance – Why Do Homeowners Need Title Insurance?
Homeowner’s title insurance is essential for several reasons. First and foremost, title insurance protects your investment as a property owner. When you purchase a property, you want to feel confident that you have clear ownership rights and that your investment is totally secure. Title insurance gives you that peace of mind.
Even with a thorough title search, issues can still be discovered after the purchase. For example, there might be a previously undisclosed property lien, an error in the public records, or an unknown heir with a claim to the property. Issues like these can negatively impact your property’s value or even place your ownership rights in jeopardy. The Impact of Extreme Weather on Real Estate Closings
Title insurance acts as a safeguard when title issues arise. It covers the costs of defending against any claims or challenges to your property’s title and ensures you receive financial compensation for any losses you suffer due to title defects.
How to Get Title Insurance
The first step to getting title insurance is to find a reputable provider of homeowner’s title insurance. Then, the insurance company will perform a thorough examination of your property’s title history to uncover any potential defects or claims against your property. This search utilizes public records, deeds, mortgages, and other relevant documents to establish a clear and marketable title.
Once the title search is completed, you can be issued an appropriate title insurance policy. Get in touch with a dependable title insurance agent today and start on the path to peace of mind!
