Let’s talk about title insurance. What is it and why is it important?
What is title insurance?
Title insurance protects homeowners against any loss that may arise from title related issues. While homeowners insurance protects against future physical mishaps to the home itself, a title insurance policy protects the homeowner from undiscovered preexisting title related issues.
Why you should purchase an owners and lenders policy:
If you are obtaining a mortgage when buying your home you will more than likely be required to purchase a lenders title insurance policy by your mortgage lender. The lenders policy protects the lenders interest in the property up to the outstanding balance on the mortgage. The owner’s policy protects the homeowner.
What does title insurance cover?
Prior to closing, a title insurance company will perform a comprehensive title search to become aware of any “clouds” or faults on title that could jeopardize future owners. They will search through public records, past deeds, wills, trust agreements, and more to ensure that title to the property has historically transferred correctly from owner to owner.
*Note: No title search will guarantee that a future claim such as fraud or forgery will not arise, however, the owner’s title insurance policy you purchase as a home buyer will protect you against any of these claims.
What does a title insurance policy cost?
The cost varies based on the price of your home. One thing to consider is the premium is charged only one time, and the coverage lasts for the entire time you or your heirs own the property.
Here is a helpful title insurance policy calculator you can utilize to obtain an estimate of what a policy will cost you as a home buyer: https://facc.firstam.com/Calculator/Home
Torben Yjord-Jackson – Realtor
EXP Realty of CA, Inc.