If you’re purchasing a home for the first time, there are a lot of steps to the process that you may have not been aware of. One of these is purchasing a title insurance policy on your property. Purchasing title insurance is important because it will not only protect you in the event there are legal issues with your title in the future, but it is also required from most mortgage lenders. Title insurance will protect you in the event that someone claims to have ownership rights to your property. It will cover the legal fees, and in the event that the title is found to be rightfully theirs, your title insurance policy can compensate both you and the lender. Reach out to Mathis Title for more information about our service offerings.
What is Title Insurance?
Title Insurance is a form of indemnity insurance which insures against financial loss from defects in title to real property and from the invalidity or enforceability of mortgage loans. Policy coverage defends against a lawsuit attacking the title, or may reimburse the insured for the actual monetary loss incurred up to the dollar amount of insurance provided by the policy. Overall, title insurance will protect you in the case of a challenge to your ownership of the property.
Title Insurance differs from other types of insurance policies because it protects against future occurrences, whereas title insurance protects insurers against claims for past occurrences. It is also different because it usually only requires a one-time payment, rather than monthly payments. If you ever refinance your home, it’s possible that you may get a discount on your new lender policy due to having an existing owner’s policy.
When it comes to title insurance, there are two types- Owners and Lenders. A real estate owner can choose to purchase title insurance, while most lenders will require you to purchase it. Property owners purchase title insurance to protect their investment in the property. In Virginia the borrower will also have to pay for the lender’s title insurance. Lenders will only have title insurance so long as there is a mortgage. If the mortgage is paid off, then the coverage the lender has will expire. If the mortgage is refinanced, then the new lender will want their own policy.
What Title Insurance Covers
Title insurance commonly covers errors in the public record, undiscovered liens, omitted heirs, and fraud. A title examiner will look through public records to ensure that the property passed either by sale, through will, or perhaps even a gift to the correct or intended person. The examiner will confirm that the property has changed owners legally. They will also check to ensure that there are no current legal claims against the house, including encumbrances such as liens, mortgages, or any instance that makes the title non-marketable. Title insurance protects the small number of people of people who have a problem with their title after having purchased the property. Title insurance is highly valuable because there is no way of detecting a problem before they arise.
Why You Should Obtain Title Insurance
Skilled title professionals can predict most problems associated with the property based on their experience. Usually these problems are filing errors, forgeries, or undisclosed heirs as they are difficult to identify. Obtaining a title insurance policy helps protect you in the event that some of these issues are uncovered after you have purchased the property. It will help defend against any litigation that challenges the validity and legality of you as the new property owner.
Title Insurance is also designed to ensure your ownership rights to the property. While you will only pay for title insurance once, the coverage will last as long as you own the home. Reach out to Mathis Law Company for more information and to learn more about our services.