What is the purpose of Title Insurance? First let’s take a look at what “Title” means to get a better understanding of Title Insurance. It is the legal right to possession of ownership. Title insurance protects the holder from any losses sustained from defects in the title. In other words, title insurance protects the Buyer or new owner in case there is anything wrong with the previous possession of ownership. Most mortgage lenders require Title Insurance.
It protects your rights to your home. Whether you are buying a home with cash or mortgage, it protects you from fraudulent claims and mistakes made in earlier sales. Title Insurance is a one-time cost and is usually paid for by the Seller. But never assume this to be true as it may vary depending on how it is negotiated in the contract.
When you buy a home it is important to have a good Title company to do an extensive search at an affordable rate. The Closing Company or Attorney which will coordinate the closing of your home normally runs a Title search for you. An experienced Title officer will review and analyze all the documents from the search. They will determine the status of title for the title insurance policy.
There are typically 2 types of Title Policies you should be aware of: Lender title policies, which protect the lender, and owner title policies, which protect you. Whether you are buying or selling a home, always ask a Title Insurance company if there is a discount available. Discounts on premiums may sometimes be available.
I would highly recommend buying the Title Insurance Policy as it protects you against claims of ownership, such as title defects, liens and encumbrances as of the date of the policy. Check out services like bear river insurance for professional guidance.