This question is often asked by a lot of homeowners. If there’s one thing that you’ll probably spending most of your money on, it’s your home and that’s the very reason why you need to get a title insurance. You need to protect your investment.
A comprehensive title search is performed the moment you place your signature on the sales contract to purchase your residential or commercial property. This title search involves the examination of land records connected to your property for the past thirty years. While this examination is thorough and detailed, there are also a lot of hidden issues that may not be revealed by the process. An example would be missing heirs, forged signatures on original documents, ex-spouses and improper deeds are difficult and tricky to spot during the title search. The title insurance gives you protection from these hidden risks.
Of all the issues, unreleased liens on the property are the most common. You will still be responsible for a lien even if it has nothing to do with you because once a lien is filed on the property that you own, it becomes attached to you and it is important that you clear it immediately. About one-third of all of the properties have a title defect or issue. A title insurance policy gives 100% protection from these defects. It also gives peace of mind to the owner.
Understanding the difference between title insurance policies are crucial. Lenders require the purchase of a lender’s policy to give protection to the money that they invested in your property. This policy is often dependent on the amount of the loan and its longevity depends on the life of the loan. The lender’s policy also gives protection to the lender if ever any problem concerning the title occurs in the future.
If lenders have lender’s policies, owners are required to purchase owner’s policies too. The lender’s policy will only cover the lender’s interest in your property- this means, it won’t be able to protect you, the homeowner. If a problem concerning the title arises in the future and you have not purchased an owner’s title insurance policy, you will be at risk spending a huge amount on legal expenses to defend yourself from claims on your property. You can be spared from this if you have an owner’s policy.
You can purchase an owner’s policy during the closing of the transaction. You only need to pay for the owner’s policy once, and the fee depends on the sales price. While the effectivity of the lender’s policy is only equivalent to the life of the loan, the owner’s policy will protect the homeowner and their heirs of the property for as long as they maintain their ownership.
When it comes to refinancing your home, you will be asked by your lender to get a new lender’s policy since you are getting a new loan. The lender want to make sure that he or she is protected should there be problems in the future. This does not mean, however, that you need to buy a new owner’s policy because the original policy will be in effect for as long as you maintain your ownership of the property. Obtaining a new lender’s policy entitles you to a discount or reissue rate if you already have an owner’s policy. Attorneys’ Title Services, LLC applies this reissue rate discount whenever available to purchases and refinances.