In your lifetime, you’ll purchase a range of insurance products. As soon as you own a car, you shop for and buy personal auto insurance. Most people also buy health insurance at some point, whether they pay the full premium, or only a portion. When you buy a home, you buy homeowner’s insurance. If you mortgage that home, your lender may require you to purchase a lender’s title insurance policy. There’s one more type of insurance you should consider when buying your home. It’s called owner’s title insurance and it’s one the best home protection systems you can buy. Read more here about what it does and why you should have it.
What Is Owner’s Title Insurance?
The lender’s title insurance policy protects your lender’s interest in your property if there’s an issue that surfaces with the title. The policy is based on the amount you’ve financed. As you pay down your loan, the policy amount decreases. Once you pay off the loan, there is no more policy. This insurance policy does nothing to protect you, the buyer. The owner’s title insurance policy is designed solely to protect the homeowner. It’s normally issued for the amount you paid for the property. You pay a one-time fee and hold the policy as long as you own the property. Home buyers who don’t want to risk losing their home, protect it with title insurance.
What would you do if after you had the deed for you home safely filed in your lockbox and someone came forward claiming they were the real owners? It happens. Wills get overlooked. Long lost heirs sometimes show up and want to claim their interest in a piece of property. The home you fell in love with ends up belonging to someone else. And they can claim it if you don’t have good title insurance. Don’t let undisclosed heirs steal your home. Make sure you purchase title insurance before closing day.
Speaking of heirs, if you or your heirs own your home, your owner’s title insurance protects your property rights.
Unpaid Taxes and Liens
When a lien is placed on a property, that property is supposed to be disqualified from being sold. There are several types of liens that can be placed on a property. There might be one or more outstanding mortgages. A previous owner could have had a judgement granted and subsequently a lien placed on their personal and real property. The most common lien is a tax lien. When a homeowner doesn’t pay property taxes, the city or state can put a lien on the property. The title company who processes your paperwork during the closing process does research to ensure there are no liens on the property.
Record Keeping Mistakes
The older a piece of property is, the more records have been passed down over the years. It’s not uncommon for there to be mistakes in the public records on your home. Generally, this is because, over time, records weren’t properly updated. One common error is a discrepancy in the true square footage of the home. Another common error is in the measurements of a piece of property. Remember, humans keep records. Clerical errors happen. To protect you against errors caused by inconsistent historical records and human recording errors, always purchase title insurance.
These are just a few reasons why you should consider title protection for your home. If you haven’t yet protected your largest investment, don’t wait until after closing day. Contact Secure Title Lock today for more information on buying owner’s title insurance.