What is Title Insurance? | Monday Minute February 8, 2021

What is title Insurance, and do I need it?Title insurance protects buyers and lenders from any financial losses due to any defects found on the property’s title.These defects include things such as: Unpaid taxes or assessments, unpaid liens of judgements, unreleased mortgages, mistakes in the recording of the title or legal documents, forgeries or fraud, conflicting wills, etc.When buying a property, especially one that has changed hands a few times, there is always a potential for defects on title to come up.  And even though the title company does an extensive search during the purchase transaction, things can be missed in these searches.  This is where title insurance comes in handy.  In the event that something comes up after you have purchased the property the title insurance will protect your interest in the property and fight on your behalf to correct that defect.Not having title insurance could mean exposing yourself to significant risks.  For example, if there was a claim filed for back taxes due, without title insurance, the entire financial burden would completely rest on you, the owner. When purchasing a property with a mortgage, most lenders require a lender title insurance policy which specifically protects the lender’s interest in the property.  However, the title insurance only covers up to the amount of the mortgage held on the property.Where-as, an owners title policy, is what will protect you (and your heirs) against any defects that come up during your ownership of the home.  Protecting you from the costs, attorney fees, and expenses incurred to defend against any defect that is insured in your policy.  It can also protect you when you are getting ready to sell the property from any financial loss if the property sale were to fall through due to a covered defect in title.If you have any questions about title insurance or anything else in the home buying process, give us a call today.