What is the largest purchase you will make in your lifetime? Your home! Yeah, it’s a big one, considering the average sale price on a home within the U.S. is currently $374,900. There’s so much this new home adventure will bring to light for you, but unexpected issues regarding the title of your property after you’ve made the entire transaction should not be one of them. In comes title insurance to ensure that this isn’t something that you and your family have to worry about. Title insurance is a policy that protects mortgage lenders and homebuyers against any defects or problems with the title in a transfer of property ownership. If a title dispute comes up during, or after, the transfer of a property, the title insurance company may be responsible for the costs of any legal damages incurred, depending on the policy. “Now, how does this work exactly? Is my title company a knight in shining armor, who just takes care of any issue that may pop up?” Well, to begin we look great in shining armor, but also your title refers to your legal rights as the owner to use the property as you deem fit. Ideally, you’ll receive the transfer of a clean title, free from liens or any other claims. If you don’t get title insurance this could mean that you’re on the hook for any claims or issues that arise after your purchase of the property.
What does a title company do, exactly?
A title company performs a title search, ensuring the property is properly owned by the individual trying to sell it to you. They search through all public records to find out if the property’s ownership is free and clear and that there are no errors or omissions in the chain of title. If a title has any defects or issues with the public records or prior documentation the title company may decline to offer a policy.
What sorts of title insurance exist?
- Lender’s title insurance
- A lender’s title policy protects your lender from liability for the life of the mortgage if a title issue were to come up. Your lender will expect you to purchase this policy on their behalf.
- Owner’s title insurance
- While an owner’s policy isn’t considered “necessary”, it’s a very smart investment. As mentioned above, this is the largest purchase you will EVER make! Your owner’s policy will protect you and cover costs in the event of an ownership or title dispute.
What is covered under title insurance?
- A lien from contractors that weren’t paid in full, or if there are back-owed homeowner’s association fees due or other outstanding debts or fees.
- A past forged, falsified or fraudulent deed or documents.
- Any encroachments.
- Ownership disputes or an unknown heir.
How much does title insurance cost?
Title insurance is paid as a one-time premium and is approximately 0.5-1% of the home’s value, however, prices by state can vary. The premium is usually paid at closing.
How does one buy a title insurance policy?
You’re already here! But ordinarily, your lender or real estate agent could advise you if they’re familiar with a title agency. It’s also a great idea to do your own research and ask friends that have recently purchased homes to find out more about their experience, or if they had a great title company in their real estate transaction who they used. So, since you’re already here our amazing Gables Title Group team is really excited to assist when you purchase or refinance your real property, give our team a call or email. We’re looking forward to helping you obtain a clean title on your property.
Leave a Comment