Saturday, January 21, 2017

Everything You Wish You Knew About Title Insurance




Title insurance is a two-part transaction. When you purchase the title insurance policy, the title company conducts a public records search on the parcel. 

This records search may turn up liens, taxes and other unpaid claims against the property. The insurance policy also verifies that the seller actually owns the property and has the legal right to sell it. 

When purchasing title insurance, you will want to know these important details.

What Title Insurance Covers


Title insurance covers legal judgments, unpaid bills and claims against a property. For example, if the past owner did not pay their city water bill, the title insurance will protect you against that lien. 




Title insurance also protects you from past court judgments of a spouse or heir to the property.

How Much Coverage Do You Need?


The purchaser of the home or property is responsible for paying for the title insurance policies. You must pay for the owner's policy, which will cover you, and the lender's policy, which covers your loan. 

A federal law, called the Real Estate Settlement Procedures Act or RESPA of 1974, stipulates that no entity can require you to work with a specific title insurance company. 

Your owner's title insurance should cover the value of the property. The Lender's policy should cover the loan amount.

Title Insurance


The point of title insurance is to protect you against any liens, unknown heirs or claims against the property that you want to buy. 

If you are taking out a mortgage, your lender may require that you purchase title insurance. Professionals, like those at TitleSmart, know that the insurance policy protects both you and the lender from any unexpected encumbrances against the property's deed. 




The policy may include other risks, such as bail bonds, divorce degrees, wills and court judgments involving the property.

Frequency of Deed Defects


According to the Bank Rate website, one in three properties has a deed defect that is covered by title insurance. 

In most cases, these defects are discovered and resolved before the closing of the real estate transaction. Some of the most common deed defects include unpaid utility bills, unpaid taxes and undisclosed heirs and spousal claims.

Purchasing a home or piece of property could be the largest financial transaction that you make in your lifetime. 

Title insurance protects you personally and financially against unforeseen circumstances. Be sure to hold on to the paperwork related to the title insurance indefinitely, even after you sell that piece of property.


1 comment:

  1. Title company covers very important thing of our life. Property, legal judgement, unpaid bills etc.

    ReplyDelete

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