Learn About Residential Title Insurance
You’d agree that your home will be one of the most significant purchases you’ll ever make. Unfortunately, despite the expensive nature of home purchases, people still get into unexpected issues. One of the most common is unknown people claiming the right to ownership of the home after completing the transaction. Nobody wants the long, tough battle of proving that they’ve purchased their home from the right owner. That’s where title insurance comes into place. This article gives you a detailed explanation of what it is and why you need it.
Understanding a Title Insurance
This type of insurance protects homebuyers and mortgage lenders from the negative effects of a mix-up of titles when property ownership is being transferred. The insurance policy typically means that an insurance company would pay specified legal damages to buyers in title disputes.
By title, we mean the legal right of ownership of a property. Someone claiming part or full ownership of the property after you’ve completed the purchase is not good. Title companies help them run background checks on the property’s known and unknown titles before purchase. These title companies typically provide insurance to cover you from potential title claims as proof of a job well done.
Types of Title Insurance
Like most other insurances, Title insurance is a broad topic. However, it is generally divided into the owner’s title insurance and the lender’s title insurance. Most lenders require borrowers to purchase lenders’ title insurance policies. This type of policy protects the lender if the property seller cannot fully transfer ownership title to the borrower protecting from a loss.
On the other hand, owners’ title insurance policies serve as additional protection for buyers against potential financial losses.
In some extreme cases, sellers intentionally try to sell homes that don’t belong to them. We’ve seen renters pose as sellers to dubiously extract money from unsuspecting buyers. However, that happens only once in a while.
Typical title issues do not sound as grievous as that, but they are often more complicated. For example, a seller might have joined funds with a friend or a brother with whom he’s now lost communications to purchase the house he’s selling to you. And he doesn’t know that this brother or friend needs to also sign the purchase documents. There’s also the possibility of a seller inheriting the house in terms of a will and being replaced by a new will that takes the house ownership from them. Whatever the situation may be, rest assured that title insurance will help you handle potential losses that may arise from the title tussle.
Whether you are buying your first home, you don’t want to go through the draggy process of fighting off people claiming title to your home. That’s why you must employ a reputable title company to help you check properly. Top-level title companies like Nationwide Title Agency offer title insurance, so you can rest assured that we’ve played out parts well to help you avoid possible future title claims from any random person. Call today for assistance at 954-755-8210