Do I need title insurance when buying a home?
Do I need title insurance when buying a home? The answer to this question is absolutely yes! You do need title insurance when purchasing a home because, title insurance will protect you and your lender from encountering a situation where the seller of the home or property doesn’t have a clear ownership of the home, even though they claimed that they did.
What If You Don’t Have Title Insurance?
If you try to purchase a home and don’t have title insurance, the owner will not be able to transfer ownership of the home or property to you and you can even risk the chance of losing the home altogether, especially if the seller doesn’t really own the home that they are trying to sell.
Sadly, it’s not uncommon to hear cases of renters posing as sellers, and trying to sell the homes that they are renting. Home title issues don’t make the news very often but they can be very complicated especially if multiple people own the same home or property and one or more of the owners can’t be found, and the signature of each owner is needed to sell the home.
Even though you may never need to use your title insurance, it’s important to have this form of insurance protection because, with a high value transaction like purchasing a home, it’s better to do everything possible to protect yourself financially.
Where Can You Get Title Insurance?
Once you’ve signed the purchase agreement for the home your closing or escrow agent will start the process of helping you to get title insurance.
Your title insurance will be chosen from one of the major title underwriters in the United States and you can expect to pay a one-time only fee of around $1,000 for your title insurance policy. That may sound expensive, but considering the purchase you are making, and potential headache of title issues, it’s a pretty reasonable price.
Title insurance will also protect you in cases where liens were filed against the house by collection agencies or people since it’s not uncommon for a lien to be filed against a homeowner especially if they owe back child support or contractors fees.
Understanding Title Insurance
When you purchase title insurance your policy will typically be comprised of two policies: a borrower’s policy and a lenders policy. Both parts of title insurance are important but the lenders policy is the critical part of title insurance because, it will protect you and pay for legal costs or mortgage payments if someone else files a claim on the home that you’ve purchased.
To learn more about the importance of title insurance when purchasing a home or to view the latest Orange County homes for sale, contact Fred Sed & Associates today by calling us at (949) 272-0125.