If you’ve purchased a home in the past or are attempting to do so now, you’ve probably heard the term title insurance. What is it? Why do you need it? Put simply, purchasing title insurance is the best way to protect yourself from major financial loss after purchasing a home.
What Is Title Insurance?
In the event of a defect in the title to your new property, title insurance will protect you from financial loss and legal expenses. After purchasing title insurance, an examiner will review your property’s history and try to eliminate title concerns before you purchase the home.
Title insurance isn’t like other types of insurance such as life insurance or home insurance. Instead, you only pay for it once when you close on your new home. Your title insurance will protect you until your mortgage is paid in full.
What Does Title Insurance Protect You From?
There are many potential title disputes and defects your title insurance will protect you from. Some of the most common include:
- Financial liens against the home
- Unpaid taxes
- Property damage you weren’t aware of before purchase
- Title forgeries or fraud
- Mistakes found in the home’s title records
If any of these issues arise during your purchase, without title insurance, you would be held financially responsible, which can be quite costly in the end.
How Does Title Insurance Work?
Your home’s title is a document that proves who’s the rightful owner of a property. There’s information inside the title to prove ownership such as a chain of title, easement issues and liens. Once the title professional finds the title clear or works out the kinks, you’ll make the insurance premium payment on the date of your closing. Finally, you’ll receive the title policy on behalf of your title insurer.
Buying a Home? Reach Out to The Lonergan Law Firm Today.
Are you considering buying a new home or property? You’ll need someone on your side to help you protect your real estate interests. The Lonergan Law Firm P.L.L.C. offers everything you need from closing services to curing title defects.