Knowing what title insurance is and why it’s important is essential for home buyers to understand. In general, title insurance protects a purchaser from problems with a title but can also protect lenders as well.
Both home buyers and lenders can purchase title insurance which is important for them to keep in mind. Lenders may require title insurance from a mortgagor to protect their security interest and a home buyer may purchase title insurance to protect their investment. Because there is a cost associated with title insurance, it is important to know how to evaluate the benefits of title insurance, as it may be worth it.
The process of purchasing a title insurance policy requires an extensive title search of the property. The title search helps to protect the future owners of the property by identifying potential issues with the title. In addition, title insurance provides protection concerning issues with the title that may pop up to challenge the legality or validity of the property rights of the new property owner. Common title insurance claims can include errors in the public record; undisclosed liens on the property; omitted heirs; and fraud.
Title insurance searches for input errors in the public record, problems with the chain of ownership or any encumbrance on the property such as a mortgage or lien. Because of what a significant investment a home is, title insurance is important to consider to protect that investment. Understanding the ins and outs of title insurance is essential for home buyers.