Title insurance protects the holder from any losses sustained from defects in the title. It’s required by most mortgage lenders.
Here are five other things you should know about title insurance:
- Protects ownership right to home
It protects your ownership right to your home, both from fraudulent claims against your ownership and from mistakes made in earlier sales, such as a mistake in the spelling of a person’s name or an inaccurate description of the property.
- It’s a one-time cost
It’s a one-time cost usually based on the price of the property.
- Who is responsible for payment
This can vary depending on your state and local customs.
- Lender and Owner policies available?
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
- Discounts on premiums?
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 (REALTOR.org/realtormag) with permission of the NATIONAL ASSOCIATION OF REALTORS®. ©2008. All rights reserved.