You Bought a New Home,
But Should You Get Title Insurance?
home selling articles and tips
While buying a new home can be exciting, it can also be fraught with numerous unexpected problems. For many people, one of the most common problems involves issues regarding the title to the property.
With many homes, chances are they have gone through several ownership changes over the years. As a result, there may be a variety of problems that will be discovered during a title search, such as liens, unpaid taxes, or forged signatures. To guard against these issues derailing the buying process, it's a good idea to purchase title insurance.
Do I Need Title Insurance?
Yes, virtually anyone purchasing a home needs title insurance. In fact, if you're getting a mortgage for your home, most lenders will require you to purchase title insurance for an amount equal to the loan. Designed to protect the lender, the protection lasts until the loan is repaid.
What Will Title Insurance Do For Me?
Even though the title insurance that's required when getting a mortgage protects the lender, it does not protect the buyer's equity in the property. Professionals, like those at TitleSmart, know that to do this, you'll need to buy an owner's title policy equal to the home's full value. While this may sound like an additional hassle when buying a home, the good news is that in many cases a seller will pay for this in order to ensure a clean title is delivered to the buyer.
Events Out of Your Control
In some situations, homeowners may find themselves dealing with events that are beyond their control long after they have purchased their property. For example, with identity theft being such a problem in today's world, it may be possible for a person to take out a new mortgage under the homeowner's name. Or in other situations, a town or city may advise homeowners of a zoning violation that should have been corrected by the previous owner, forcing them to pay hundreds or thousands of dollars to fix. Whatever the issue, most title insurance policies now come with options for expanded coverage to guard against these unexpected and often expensive surprises.
While it may seem as if there is always one expense after another associated with buying a new home, title insurance is one expense that is usually well worth paying for as the years go by. Whether it's an identity thief causing havoc or a little-known zoning ordinance that must be addressed, having title insurance will make these and other problems much easier to solve.
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