Buying a home is the largest investment most of us will ever make. From purchasing the perfect property to covering the costs and furnishing that new home, the expenses add up quickly. When your money counts, it can be tempting to decline optional owner’s title insurance – especially when most buyers already have to purchase their lender’s title insurance policy.
Getting title insurace is one of the standard steps home buyers take before closing on a home purchase. Title insurance is crucial for a home buyer because it protects you and the lender from the possibility that your seller doesn’t or the previous seller didn’t. The national title company helps to protect your home from losing its ownership.
In this article, we will discuss how title insurance work in great detail.
How to get Title Insurance?
Your escrow or closing agent will launch the process of getting you title insurace soon after your purchase agreement is signed. Usually, your closing agent or attorney will choose your title insurer to you, from one of major title insurace underwriters. You will probably need to shell out non-time fee of around $1000 for title insurance. The process is all very standard and likely to go through without a hitch.
What could happen if you don’t get Title Insurance?
- The risk of buying problems
Filing errors that disrupt the chain of ownership can lead to discrepancies with severe consequences like back taxes, filed incorrectly and heirs not added to ownership chain. Since errors affecting homeownership can be complex hence getting a national default title services is important.
- Inherit existing debt
If the seller deliberately hades a line or doesn’t know there is a lien filed against the property, you may end up having to pay outstanding debt. Several types of liens such as unpaid state and federal taxes, mortgages, community association fees, work performed by contractors etc.
No one wants the past to come back and bite the homeowner this way, which is why the title insurace company will perform a title search as its first task before issuing the policy. The search involves combing through the public records concerning the house including past deeds, wills, trusts, divorce, bankruptcy filing, court judgement and tax records. Check out here to learn what are the closing costs the home seller in great detail.