If you are a first time home buyer, you should prepare yourself to encounter a lot of new (and probably confusing) terms, fees and requirements. This can get overwhelming, but and experienced and knowledgeable real estate agent can easily walk you through the process and address any questions or concerns that you may have. One of the costs you will encounter during your real estate transaction is title insurance. In most cases, buyers have no choice but to get title insurance, otherwise they won’t get a loan. But what exactly is title insurance.
When you purchase a property, you want to make sure that the people selling it actually possess full and legal title. This will be verified by the party who will conduct the closing, by going to the local property records office and researching the home’s history of ownership. However, although the records at the property office are official, sometimes they can be erroneous. Sometimes, the person doing the title search can make mistakes. Other times, that information simply isn’t available.
Title insurance is meant to protect lenders and home owners against issues that could cloud the title. For example, say the house you want to buy was owned by Mr. Smith 10 years ago, and Mr. Smith was a bigamist with a second wife. That information would not be likely to show up on the local property records, but if the second Mrs. Smith has an ownership claim against the property, you could ultimately end up losing the house.
Lenders coverage is one form of title insurance designed to protect your lender in case any problems arise regarding the title. Lenders covers is required and usually provides protection up to the original mortgage amount. If there is a claim against the property, the title insurer will fight on your behalf and the policy will pay off the loan if necessary.
Owners coverage is another form of title insurance that will protect your equity. Usually, you can also get an inflation rider with an owner’s policy, which means that the value of your title coverage goes up along with the value of your home.
If you are planning to buy a home, let The Incorvaia Team make the process as easy as possible for you. Call us at 440-879-7130 today!
