What is Title Insurance
Posted by Elizabeth Dennis on August 29, 2011 | No Comments
Purchasing a house can be a very stressful time in someone’s life. There are one thousand decisions that must be made. Some of these choices are small while others can be quite large. One of the smaller decisions that can sometimes be forgotten is dealing with title insurance. This small insurance policy may be one of the best things you’ve ever purchased as it can protect you from any future potential problems and save the buyer thousands of dollars as well.
The main purpose of title insurance is so no one else can lay claim to your property. It will also provide future piece of mind that you will not incur any unexpected debts on your house. While you may not think that this can happen to you, it is better to be safe rather than sorry. Even if you have owned the property for years, title insurance means that the lender is reassured regarding their loan and the owner knows that they are protected from any possible problems.
There are numerous threats that can arise when it comes to property. For example, a long lost heir may suddenly materialize and claim the property, a previous owner may have taken out a loan on the property which could become the new owner’s debt, or a previous owner may have taken out a mortgage without the husband or wife knowing about it.
If any of these problems arise, a new owner may be forced to move out of the home if they don’t have title insurance. In addition, the new owner might find themselves legally bound to pay a debt on a house that is no longer yours. However, if you have title insurance than the title company will be the one to fight any battles, litigation or payments towards your case. In the extreme case you are forced to move out of the property, the title company will either pay you cash or purchase the mortgage from the lender.
While most homeowners only think about fire or flood insurance, title insurance costs very little for a lot of peace of mind. While regular insurance will allow you to keep your land in the case of your property being destroyed in a natural disaster, title insurance protects the owner if the actual house is taken away.
The nice thing about title insurance is that it will be in effect as long as you are in and own the house. In addition, after paying an initial premium there are no more fees to be paid. This is a small price to pay for the reassurance that your home cannot be taken away from you by some unforeseeable surprise that could occur at any point down the road.
Your lender should be able to show you more details on title insurance and the paperwork can be ready by the time you are ready to close on the house. While not a requirement, it is certainly worth looking into when purchasing a new home.
Tags: title insurance
Filed Under: Home Insurance
