If you recently bought a home, you may be considering title insurace that protects you from taking a financial downfall triggered by property ownership issues. Title insurance is a type of insurance that covers potential damages from errors in the ownership records of your home or property, In most cases, you purchased title insurace when you get a mortgage. It covers either a homeowner or mortgage lender, but you will need to pay for both types as part of your closing cost.
The national title insurance company pays the policyholder if there is anything wrong with the title or property. In most of the countries, the recorder of the deeds doesn’t guarantee perfect accuracy in its record-keeping means that it is possible for someone with an older document to press a claim on your newly purchased home if there is evidence of past fraud or forgery. Title Insurance pays for the cost of perfecting you title rights or provides compensation if you lose the property altogether.
In this article, we will discuss title insurance in detail.
What is Title Insurance?
When a property brought or sold, a record of that transaction is usually filed in public archives. Events that may affect the ownership to this property like liens or zoning restrictions also get archived. This is part of a property’s title.
So when you purchase title insurance, a title company runs a deep search through these and other records to detect any issues with ownership of the property. It may also look at deed, tax and court records to verify ownership history. Typically, you pay premiums for this service at closing. Your policy is good for as long as you or your heirs own the home. If you have an issue with the home before or after closing, your policy covers you against any losses.
Why do you need Title Insurance Company?
Purchasing lender’s title insurance is a mandatory part of the mortgage process. However, it is often a good idea to buy national default title services for yourself as the homeowner. Title insurance can compensate you for damages or legal costs in a variety of situation.
It protects you from:
- Previously unreported liens and easements on the property,
- Forged transfers of ownership rights in the property.
- Unintentional errors in recording or filing of documents
- Any other title defects that existed prior to the start of your policy
Whether you need title insurance depends on several factors. Title Insurace may kick in if something that happened in the past resurfaces. So it may be suitable if your home is very old. You can choose your own title insurance company for both lender’s and homeowner’s title insurance. It can often provide you discount if your purchase both set of policies at the same time. Check out here to learn the importance of title insurance in great detail.