Understanding Title Insurance
Buying a home is a big dream—and an even bigger investment. That’s why protecting that investment is extremely important. One way to safeguard your property is with title insurance, which protects you from legal disputes or financial losses.
Lender’s Title Insurance vs. Owner’s Title Insurance
Lender’s title insurance protects the lender if the seller can’t transfer ownership. This policy only covers the lender and may be required to get a mortgage.
Owner’s title insurance protects homeowners from financial losses related to title defects. Most states do not require this type of insurance, but it can be a wise investment for peace of mind and protection against expensive legal battles.
Owner’s title insurance covers a wide range of possible title defects, including:
Liens: Financial claims against a property, such as mortgages, taxes, or judgments.
Easements: Any right-of-way granted to others to use or access a property.
Boundary disputes: Conflicts over property lines.
Adverse possession: Claims ownership of a property from unauthorized use.
Forged documents: Fraudulent documents that can affect the property’s ownership.
Hidden heirs: Individuals who may have a claim to the property.
How It Works, and What It Costs
To get title insurance, a title company will thoroughly search public records to identify any title issues. They will issue a policy protecting the owner against future claims if no defects are found. The cost of title insurance varies based on property value, location, and type of home, but it’s a small investment compared to the potential financial risks.
Title insurance can be a valuable tool for protecting your property. Although the cost of title insurance might feel like an added expense, it is a relatively minor investment compared to the risks. If you’re buying or refinancing a property, it’s important to understand the basics of title insurance. Talk to a real estate attorney for more information.
These articles are for educational purposes only and provide general mortgage/financial information. Products, services, processes, and lending criteria described in these articles may differ from those available through Union Savings Bank. For more information on available products and services and to discuss your options, please contact a Union Savings Bank loan officer or representative.
