Title Insurance & Why Home Buyers Need It
If you're in the process of buying a house, then you've probably heard about title insurance at least a few times. Though buying title insurance is technically optional, if you're taking out a loan to buy a home, most lenders will require you to purchase title insurance to protect them and you in the event anything happens. But what is title insurance, and how does it protect you and your property? And do home buyers really need it? Let's take a look.
What is title insurance?
Title insurance protects the buyer if they are sold a home that the seller doesn't own. While some situations can be scams (like a renter posing as a seller of the house), most sellers may unknowingly sell you a home for which they don't have full property rights. Examples of this include:
a spouse selling a house without the co-signature of the ex-spouse
inheriting a house based on the terms of an outdated will but not under the conditions of the updated will
In these circumstances, title insurance will protect you from any financial loss that may occur when transferring the ownership of the property to you.
Title insurance also protects you against any unknown or undisclosed liens against the property. A lien is a legal claim to be paid from the sale of the home from the homeowner to a lender or agency. These liens are often related to unpaid taxes, child support, or contractor fees.
Even though the chances are small that you'll ever have to file a claim to your title insurance, it's always better to be safe than sorry. If anything were to happen with your ownership rights, costs could be astronomical. The risk of the financial loss you could face isn't worth the small fee you'll pay to have title insurance!
What am I protected against with title insurance?
You may be surprised at how title insurance can protect you from several circumstances! Here are just a few of the protections you'll receive:
Ownership by Another Party
Property Survey Errors
Building Code Violations from Previous Owner(s)
Incorrect Records and/or Documents
Forgery and/or Fraud
Restrictive Covenants such as Unrecorded Easements
Whether you're buying or selling your property, Guarantee Abstract is here to help you throughout the process. With 90 years of experience in Enid, OK, our experienced and professional agents have provided support for buyers, sellers, lenders, and real estate agents to help make the process easy and stress-free. We know how confusing real estate closing and title insurance can be, and we're here to support you. Visit our website to learn more or call us at 580-237-5537 for Abstract Services or 580-237-2244 for Closing Services.