With so many documents and forms to keep track of, buying a home can sometimes feel like putting together a jigsaw puzzle. Amidst all of the paperwork, there’s one piece of protection that you don’t want to overlook — title insurance. Title insurance is a protection for buyer, seller and lender, and ensures a legitimate transaction between all parties. To review: the title is the document that gives you ownership of a property. As a buyer, you want a clear title, because otherwise you could encounter trouble down the road. Problems with the title can come in a variety of ways, but could include any of the following:
- Errors or omissions- If the deeds and records have not been examined thoroughly or an error has been made, you may discover unknown easements or property lines that damage your investment in the property.
- Heirs- You don’t want the previous owner’s heirs to claim the property as their own after you’ve purchased it.
- Unpaid taxes
- Forgery
Title insurance is a one-time fee paid at closing that fully protects the lender in case a problem with the title ever arises. A title search is conducted as part of the selling process. The deeds and public records are investigated to see if there are any problems with the property. However, even after the title search comes back clear, there is a chance that undiscovered problems could linger and cloud future ownership claims. This is where title insurance comes into play. A title insurance policy protects you in case critical information arises that may cause you to lose your title. The rates of the title insurance are based on the price of your home, and the type of policy you buy. Some are more comprehensive than others, so you’ll want to know what’s covered in your policy. Do some research, and figure out what type of policy will fit your home and budget. With the right title insurance, no unwanted surprises will be able to stand in the way of you and your new home.
