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  • Writer's pictureDamon H

What Is A Title Insurance and Why Do You Need It?

Updated: Jun 10, 2023

Title Insurance Agreement

If you are buying a home, you may have heard of title insurance. But what is it and why do you need it? In this article, we will explain what title insurance is, how it works, and what benefits it offers to homebuyers.

What is a Title Insurance

Title insurance is a type of insurance that protects you from any defects or issues with the title of the property you are buying. The title is the legal document that proves your ownership of the property. It may include information such as the property's address, boundaries, easements, liens, mortgages, taxes, and other encumbrances.

When you buy a property, you want to make sure that the title is clear and free of any problems that could affect your ownership rights or cause you financial loss. For example, there could be a lien on the property from a previous owner's unpaid debt, a tax lien from the government, a forged signature on a deed, a missing heir who claims ownership, or an error in the public records.

Why do you need a Title Insurance?

Title insurance protects you from these risks by conducting a thorough search of the public records before closing the deal. The title company will examine the history of the property and verify that the seller has the legal right to sell it to you. They will also identify any issues or defects with the title and try to resolve them before closing.

If any issues or defects are found after closing, title insurance will cover your legal fees and costs to defend your ownership rights in court. It will also pay for any losses or damages you may suffer as a result of a defective title. For example, if you have to pay off a lien on the property that was not disclosed by the seller, title insurance will reimburse you for that amount.

Title insurance is usually a one-time fee that you pay at closing. The cost of title insurance varies depending on the value of the property, the state where it is located, and the level of coverage you choose. There are two types of title insurance: lender's title insurance and owner's title insurance.

Lender's title insurance is required by most mortgage lenders and protects their interest in the property. It covers the amount of the loan in case there is a problem with the title that affects their ability to foreclose on the property. Lender's title insurance does not protect you as the buyer.

Owner's title insurance is optional but highly recommended for homebuyers. It protects your interest in the property and covers the full value of the property in case there is a problem with the title that affects your ownership rights. Owner's title insurance lasts as long as you own the property or have an interest in it.

Title insurance is an important part of buying a home. It gives you peace of mind that you are getting a clear and valid title to your property and protects you from any unforeseen issues or claims that could arise in the future.

Keep it Foxy,

Mr Foxy

"Mr Foxy"

Damon H

Sales Manager & Founder

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