When you are buying a new home, making sure that the real estate is clear of liens or other property claims is a necessity. Otherwise, as a new home owner, you are potentially liable for resolving these claims from any third party. Title insurance is a form of indemnity insurance that covers third-party claims against real estate.
Unlike conventional insurance, which covers future events in case of a potentially harmful event (misfortune), title insurance provides protection against claims arising from past occurrences. The word “title” applies to a person’s legal ownership of the real estate.
One of the most common types of title insurance is lender title insurance, which the borrower purchases to protect the lender. Others include the owner’s title insurance, which is often paid for by the seller to protect the buyer’s equity in the property.
Why do home buyers need to buy title insurance?
The absence of title insurance greatly puts the parties involved at risk when there is a defect in the title. Imagine a homebuyer who is looking for their dream home, and instead, they find unpaid property taxes from the previous owner. Then, when there is no title insurance, only the buyer bears the financial burden of this after-tax claim.
However, when you have title insurance, there is coverage that provides protection to the buyer and continues to do so during the time he or she owns or has an interest in the property. Likewise, when a lender has title insurance, there is coverage for banks and other mortgage lenders against unrecorded liens, unrecorded access rights, and other deficiencies.
1. Protects their property rights
These days, when a property is sold, people look through the title to detect undisclosed heirs, liens, disputes, or any number of factors that are likely to occur during your property’s lifetime.
Although the steps a title company takes are highly detailed, there are discrepancies. While there are numerous types of insurance you will need to obtain for your new home, nothing other than title insurance will protect the owner from legal ownership disputes.
Even though the likelihood of reoccurring historical ownership problems is minimal, such problems do happen. However, more common problems other than historical issues are those that are deceitful.
No matter which problems may arise in connection with your property title, it is important to protect your ownership claim. With owner’s liability insurance, we have the assurance of knowing that as an owner of a new property, your rights are protected against unexpected claims during your whole ownership period.
2. Assists in preventing fraud
This is a common problem in the U.S. Although fraud frequently occurs as fake deeds for deserted properties, a number of fraudsters are also seeking ways to cheat homeowners desperate to get rid of their high-value properties.
According to sunnytitle.com, a homeowner’s title insurance is specifically created to help prevent any historical problems or fraud that may have arisen before the home was purchased.
You may find it useful to be mindful of all types of fraud likely to arise concerning your property rights, deeds and title, and then consult with your title insurance company about the best way to remain protected.
3. Home buyers will enjoy the new house without worries
The most important thing to consider when it comes down to it is having peace of mind. Particularly in the case of real estate, when you buy a house, it should be a cause worth celebrating!
But unless you have title insurance, there are always the threats of all kinds of problems. Afford yourself the security you desire by obtaining title insurance and read more on sunnysidetitle.com. Plus, you will never have this peace of mind without title insurance.
4. Minimal fee, big reward
The cost of homeowner’s title insurance may differ across states and homes, however, in comparison to the protection you will get, that one-time fee for the coverage you will pay will be minimal.
Closing cost calculators may be able to assist you in assessing the amount of property owner’s legal expense insurance you may need in your state on the basis of the value of the property you own.
Additionally, given that this insurance coverage may be acquired independently of your lender’s mortgage and legal expense insurance, one has the flexibility to search for the cheapest rates possible combined with the best coverage.
While you are at it, give some thought to working closely with skilled title examiners as well as closing teams who can provide outstanding coverage as well as in-depth title research.
5. Keeps them safe from misspellings
Updated technologies, as well as digital storage systems, contribute to the reduction of misspellings in documents – for example, during title searches. When it comes to dealing with older titles and properties, on the other hand, any spelling errors from previous years frequently may remain undiscovered.
Suppose, for example, that a number of old property boundaries and measurement errors caused your house to be built on the incorrect parcel of land. You know the process of buying a home comes with fees especially if you have ever bought a property. Title search fees, property taxes, administrative fees and homeowner’s insurance will likely be some of the expenses you’ll face.
Title insurance will protect both real estate owners and lenders from any loss or damage to their property that they may incur as a result of liens, encumbrances, or defects that may exist in the title to the property. Every title insurance policy has specific terms, conditions, and exclusions.