What Do I Need to Know About Title Insurance?

The title of this is pretty telling. A title is a legal concept that confirms you have received ownership rights on the property from the seller. The seller must be confirmed to be the only legal owner, with all the rights to initiate this transfer of title. So, to begin: What is title insurance? It is a policy meant to protect a home buyer and their mortgage lender from damages or financial loss caused by title defects or a bad title. There are several common defects, like a lien, conflicting wills, back taxes, or back mortgage payments. Another issue could be a title that is made worse by coding violations and legal issues that have not been resolved. How does it work? A title insurance policy protects you from the above-mentioned and should protect you, and your lender, from any serious losses.

What does title insurance cover? This is a multi-tiered answer because there are a lot of protections from the mistakes, or misadventures, of the prior owners. This means that if there’s a claim made against the property’s prior ownership your title insurance should ensure that you do not have to worry about the most common risks faced by homeowners, which include:

• Conflicting claims of ownership, usually happen with complications relating to wills and other similar issues.
• Lawsuits, liens, and other encumbrances against the property that are in conflict with, and could primarily, invalidate the seller’s legal claim to the property.
• Public records that are flawed or erroneous, including mistakes like incorrect, or missing, signatures.
• Fraud or forgery
• Easements or other agreements that may limit or reduce the value of your potential property.

An alternative to a title policy would be a Warranty of Title, which is a guarantee by the seller that they have the legal right to transfer ownership to the buyer and that no one else has any claim to the property. If it turns out that there is someone with the ability to lay claim to the title the warranty grants the buyer legal defense and recourse against the seller. If offered a warranty of title you should secure your investment further with your own title policy. What’s the price of a title policy? This depends on the state in which you live, the policy you select, and the price of the property you are purchasing. Most policies are between $500-$4,000, but it is a one-time payment. A one-time cost that protects you from the financial burden of defending yourself against a title dispute, if you were uninsured. Gables Title Group would love to assist you in receiving a clean title when you purchase or refinance your real property.