If you recently bought a home, you may be considering title insurance. Title Insurance protects you from taking a financial downfall triggered by property ownership issues.
Believe it or not, someone may have a legal right to the home you’re in.
So let’s take a closer look at what title insurance is.
What Is Title Insurance?
When a property is bought or sold, a record of that transaction is usually filed in public archives.
Events that may affect the ownership to this property like liens or zoning restrictions also get archived.
This is part of a property’s title.
So when you purchase title insurance, a title company runs a deep search through these and other records to detect any issues with the ownership of the property.
It may also look at deed, tax and court records to verify ownership history.
Typically, you pay a one-time premium for this service at closing.
Your policy is good for as long as you or your heirs own the home.
If you have an issue with the home before or after closing, your policy covers you against any losses.
What It Protects Against
Title insurance coverage usually depends on whether you have a lender’s or an owner’s policy.
Generally, you need to buy a lender’s policy if you take out a loan from a public mortgage lender.
It covers the lender up to the amount of the loan in the event that any problems arise with the home’s title after financing.
A lender’s policy usually stays in effect until you pay off your loan, sell the home or refinance.
An owner’s policy is often issued for the amount you paid for the home.
It covers a broad range of problems that may arise. This includes tax liens, deed errors or omissions, forgery of deed documents, fraud and mistakes in the public record.
It also covers you if any previous owners’ unknown heirs show up to make a claim on the property.
Some owner’s policies will also offer extended coverage. These protect against things like building permit violations, zoning law violations, certain types of structural damage and inaccurate surveys.
If someone sues you or your lender due to a title problem, both policies cover any legal costs or losses.
These costs or losses include your down payment, principal payments or the cost of any improvements you’ve made.
Is Title Insurance Really Worth It?
Whether you need title insurance depends on several factors. As you can see, title insurance may kick in if something that happened in the past resurfaces.
So it may be suitable if your home is very old.
What you pay for title insurance will vary based on where you live and the policy itself.
For example, a lender’s policy may cost around $2.50 for every $1,000 of coverage.
The average owner’s title insurance policy costs about $1,000. But depending on how much your home costs, title insurance could run anywhere from a few hundred to several thousand dollars.
If you can see someone suing you later, it may be a small price to pay for peace of mind.
Costs aside, whether you need owner’s title insurance really depends on how comfortable you feel buying a home based on the title information you have.
Having title insurance can potentially help you to avoid a financial nightmare later on.
Why Choose Ruesch & Reeve Legal
Real Estate is a specialty at Ruesch and Reeve.
Our experience allows quick responses to your questions, quality service, and prompt attention.
We are even able to issue title insurance policies through Attorney’s Title Guaranty Fund.
We here Ruesch and Reeve litigate a variety of real estate matters including: easements, eviction, foreclosure, liens, real estate purchase contract disputes, title insurance claims, partition, quiet title, replevin.
We are committed to providing cutting-edge legal services and creative legal planning. Let us at Ruesch and Reeve Legal help you today
Call our office at (435) 635-7737 to speak with a knowledgeable attorney about your legal needs.