TOP 10 REASONS TO OBTAIN A TITLE INSURANCE POLICY
When purchasing real estate, obtaining a title insurance policy is a crucial step that many prospective buyers overlook. Oftentimes, they overlook the need because they don’t understand the value and protection that it provides to them. Here are the top 10 reasons why you should consider getting title insurance:
Protection against hidden title defects: Title insurance safeguards you against unknown issues with the property's title that may not be discovered during the initial title search.
Coverage for legal costs: If someone challenges your ownership, title insurance covers the legal fees associated with defending your property rights.
Peace of mind: Knowing you're protected against potential title issues allows you to enjoy your new property without worrying about future claims.
Protection from fraud: Depending on the title insurance company and the policy you are issued, title insurance can protect you if the title was obtained through fraudulent means, even if it happened before you purchased the property.
Coverage for errors in public records: Mistakes in public records can lead to title issues. Title insurance protects you from financial losses due to these errors.
Protection against unknown liens: Undiscovered liens on the property from previous owners can become your responsibility. Title insurance protects you from these financial burdens.
One-time fee for long-term protection: Unlike other types of insurance, you only pay for title insurance once, at closing, and it protects you for as long as you own the property. However, it should be noted that once the title ownership changes, with the exception of estates, which may include transfers to revocable living trusts, the policy likely is ineffective. The best way to safe-guard against this possibility is to make sure your property is titled appropriately at closing and if you decide to change it after closing, you reach out to your title insurance company before contacting an attorney to prepare the deed.
Coverage for heirs: The protection offered by title insurance extends to your heirs when you pass the property on to them.
Lender requirement: Most lenders require a lender’s title insurance policy to protect their investment. However, their policy only protects their interest. It does not protect you as the owner. By obtaining an owner's policy alongside the lender's policy, you ensure your interests are protected as well and depending on the title company, will likely save you some money on the cost of the Lender’s Title Policy.
Assistance with title-related issues: If title problems arise, your title insurance company can help resolve them, potentially saving you time and money.
Remember, while the cost of title insurance may seem significant upfront, it's a small price to pay for the long-term protection and peace of mind it provides in your real estate investment.