Why YOU need Title Insurance if you own property.

When buying a car or an expensive appliance many people purchase an extended warranty.  With the initial cost and potential cost of repairs it makes sense to protect ourselves against unforeseen expenses.  But when purchasing a home, the largest purchase most people will ever make, some folks wonder why title insurance is needed.  I think some of the confusion comes in understanding how Title Insurance differs from the typical types of insurance and how it protects home ownership.

Nancy Buell of Sage Title Group, LLC explains that unlike an insurance policy such as home owners insurance, auto insurance, or health insurance, that protect you from the possible cost of future events, title insurance protects home buyers from defects or events that may have happened in the past that could threaten the title of your home.  Defects in the title could crop up months or even years later. Some the matters include:

• ·         Errors in the public record or tax record
• ·         Liens for unpaid taxes or loans
• ·         Missing heirs, un-probated wills or other estate related issues

In issuing the policy Title Insurance Company is promising to provide an attorney, cover all legal fees to defend your title to your home, correct the title problem or pay for losses up to the face value of the policy.  The policy guarantees that as of the date the title was filed the title was free of defects.

There are two general types of Title insurance Policy:

·         Owners Title Insurance

·         Mortgagee’s Title Insurance

Lenders insist on a Mortgagee’s Title Insurance Policy to protect the investment they have made in your home. The Mortgagee’s policy is only in effect for the lifetime of the loan and only covers the balance owed.  An Owner’s Policy protects your equity for as long as you own the home and AFTER you sell the home.

The premium is only paid once and is based on the purchase price of your home. Usually, the two types of title insurance are paid for at closing. Rather than paying for the coverage twice, Nancy says, a premium is paid for the mortgagee’s policy on the amount of the loan. The owner’s policy premium is based only the difference between the amount of the loan and purchase price.   

Title Insurance the best way to protect the equity you have in your home and make sure you have a clear title.  To purchase title insurance simply tell the title company handling the closing of your home that you want to purchase Owner’s Title insurance. It’s worth the peace of mind.

Sage Title Group has a number of buyer resource Free Guides available to you.  You can also call Nancy Buell for your Title Related Questions.  https://www.sagetitlegroup.com/marketing.htm