WHAT IS TITLE INSURANCE AND WHY DO I NEED IT?

When you purchase real property, similar to buying an automobile, you receive a title. This is proof that you own the property. Title insurance assures the buyer is receiving the property clear of any liens or defects. It protects against loss in the event that someone, possibly a prior owner, claims the property belongs to them. For example, after the closing is over and the sale is complete, what is your course of action if the son or daughter of a prior owner comes forward and claims the property belongs to them? Title insurance protects the buyer against these problems and more.

Besides claims to ownership, title insurance protects against invalid deeds. Perhaps the previous seller was not authorized to sell said property or was not legally competent. Without title insurance your home would be at risk. Errors or incorrect information on the mortgage, deed or other public records could put your home in jeopardy as well. Unpaid mortgages, mechanics liens (money owed to construction or other workers), unpaid taxes, water and sewer charges all become the responsibility of the new owners after the sale is complete. Title insurance protects the new owners against these dilemmas and guarantees no outstanding balances. A separate title insurance policy is also issued to the lender (mortgage company). This covers the outstanding balance on the mortgage.

Title insurance guarantees your investment is secure. Contrast to car, health and life insurance which protects against future difficulties and is paid monthly or annually, title insurance protects against past tribulations as described previously. Also, this is a onetime fee paid at closing which lasts the entire duration you own your home. It is an investment that is worth your peace of mind.




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