Buying a home is the largest purchase that most people will make in their lifetime, therefore, protecting it should be top priority. Title insurance is a powerful tool to keep home buyers secure after their purchase, but other services such as title locks also exist to bolster that protection. How does a home title lock work? Do you need it if you have title insurance? In order to answer these questions, this brief article will help you learn more about the basics of home title locks.
Understanding A Home’s Title
Before you can decide if a home title lock is right for you, you need to understand what your home’s title is and what purpose it serves. A title is a document that indicates who owns a specific piece of property. If you have purchased your home, you would expect the title to reflect that you are the owner but unfortunately, that is not always the case.
Issues in the buying process, previously unknown heirs and a history of fraud or forgery with the deed can all impact who the true owner of a home is. Ensuring that your title accurately reflects the reality of your home’s history is critical for establishing ownership.
What A Home Title Lock Does For You
A home title lock is one of a variety of tools available to make certain that your title remains clean. It serves similarly to a subscription alert service: any time that any party makes a court filing that could impact your home’s title, you will receive a notification. This keeps you ahead of the curve with potential issues, such as a party attempting to commit fraud or inaccurately collect a debt.
Is A Title Lock The Same As Title Insurance?
The short answer is no, a home title lock is not title insurance; it does not protect you financially against potential issues with a title. Home title lock policies are complementary to title insurance; you receive a notification that something is amiss, which allows you to prepare with your title insurer to combat the unexpected problem.
It is your title insurance policy that will pay for issues such as previously unknown liens. The professionals who manage your title lock subscription can help you navigate any engagements with your title insurance provider to resolve issues as quickly as possible, often before they become problems, thanks to the early notification system of a title lock.
One important element to note, however, is that if you are considering a home title lock, you should confirm that you actually own title insurance. It is a common misconception that if you paid for a line item called “lender’s title insurance” during closing, you are protected.
A lender’s policy will only cover your mortgage lender to protect their investment, and the buyer is typically required to pay for this part of closing. You need to secure your own individual title insurance policy in your name, called an owner’s policy.
Paying For A Home Title Lock
When you pay for title insurance, you pay a flat fee which is usually calculated as a percentage of your new home’s value. This is paid one time which maintains your policy for as long as you live in that home.
A home title lock, on the other hand, is managed in a subscription form in which you pay a monthly fee for the services. A home title lock tends to be very affordable, with many plans ranging from approximately $150 to $200 per year. You may cancel at any time, but the minimal expense is worth it to most homeowners for the peace of mind the policy brings.
Some companies allow you to reduce your monthly rate by signing up for services such as paperless billing or auto debits, and others may give you a small discount for paying your entire annual premium at once. Talk to the company you choose to see what options are available for making home title lock policies even more affordable.
Trust The Experts To Help You Protect Your Investment In Your Home
Your home is a large investment, and the financial repercussions of a title issue could cost you a damaging amount of money. Title insurance is a great way to secure your property against problems including unknown liens or newly discovered heirs, but a home title lock can take that one extra step toward putting your mind at ease. Knowing your title is being monitored can be a great relief. Talk to the experts at Mathis Title Company to get started on protecting your title or to ask any questions about the process.