Title
insurance protects the holder from any losses sustained from defects in the
title. It’s required by most mortgage lenders.
Title insurance protects both the lender and the secondary markets that your loan is sold to - against any defects in the title to your home or property. The title insurance helps ensure that the mortgage document on your property/home is valid and enforceable.
The amount of the policy is the same as your mortgage at the very beginning, and you will simply pay a one time fee to pay for the title insurance when you are paying for your other closing costs. Here in Texas, it is usually customary for the seller to purchase the policy on your behalf.
Here are five other things you
should know about title insurance.
1. 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. It’s
usually paid for by the sellers, although this can vary depending on your state
and local customs.
4. 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.
5. 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.
Reprinted from REALTOR® magazine (RealtorMag.Realtor.org) with permission of the
NATIONAL ASSOCIATION OF REALTORS®.
Copyright 2011. All rights reserved.
- Jessica Rumbaugh | RumbaughProperties.com
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