5 Things to Know About Title Insurance

  1. Title insurance protects the holder from any losses sustained from defects in the title. It’s required by most mortgage lenders.  It protects your ownership right to your home, both from fraudulent claims against your ownership and from mistakes made in earlier sales, such as mistake in the spelling of a person’s name or an inaccurate description of the property.
  2. It’s a one-time cost usually based on the price of the property.
  3. There are both lender title policies, which protect the lender, and owner title policies, which protect you. The lender will probably require a lender policy.
  4. Discounts on premiums are sometimes available if the home has been bought within only a few years since not as much work is required to check the title. Ask the title company if this discount is available.
  5. Even new construction needs coverage. Even though the home is new, the land isn’t. There may be claims to the land or liens placed during the construction which could negatively impact your home.

Source: REALTOR® magazine (RealtorMag.Realtor.org) with permission of the NATIONAL ASSOCIATION OF REALTORS®.