Do you need title insurance?
When you buy real estate, you will be asked if you want to purchase something called title insurance. What is title insurance, and do you need it?
By definition, title insurance is “insurance that compensates for loss from title defects or encumbrances (as liens) that were unknown but should have been discovered at the time the policy was issued”.
American Land Title Association says, “Lenders require a title insurance policy to protect their investment. You should have a policy to protect your investment as well. For a one-time fee paid at closing, an owner’s policy can protect your property rights for as long as you or your heirs own the property.”
Title insurance is a policy that protects you, a property owner, in the event that a third-party claims that they have a right to your property that did not appear in the title search, (a search of public records to determine the condition of title to real property that is the subject of a transaction (as a purchase or mortgage)). These claims could be a lien from a contractor, unpaid property taxes, a child support lien, a missing heir, an easement, or an encumbrance.
The upfront cost can vary, but it typically is 0.5 to 1 percent of the total purchase price of the property.
Overall, the benefits of title insurance outweigh the costs, and it is highly recommended that you purchase a title insurance policy. For a relatively small cost, even 75 years from now, your heirs could be protected against any claims, and you can have peace of mind!
Learn More at: https://www.homeclosing101.org/protect-your-property-rights/