What is title insurance and is it necessary?
Title insurance is a type of insurance that protects you from financial loss due to defects in the title of a property. It covers both the legal costs of defending your ownership rights and the compensation for any losses you may incur.
Title insurance is different from other types of insurance because it does not cover future events, but rather past ones. It protects you from problems that may have occurred before you bought the property, such as liens, encumbrances, fraud, forgery, errors, omissions, etc.
Title insurance is usually required by lenders when you take out a mortgage to buy a property. They want to make sure that their investment is secure and that they have a clear claim to the property in case of default. Title insurance protects them from any claims that may arise from previous owners or other parties.
Title insurance is also beneficial for buyers because it gives them peace of mind that they are getting a clear title to the property. It also protects them from any unexpected expenses or legal issues that may arise from title defects. Title insurance can save you a lot of time, money and hassle in the long run.
Title insurance is not mandatory for cash buyers who do not need a mortgage to buy a property. However, it is still advisable to get title insurance because it can protect you from potential risks and liabilities. You never know what may have happened in the past or what may come up in the future regarding the title of the property.
Title insurance is usually a one-time payment that covers you for as long as you own the property. The cost of title insurance depends on various factors, such as the value of the property, the location, the type of coverage, etc. You can shop around for different title insurance providers and compare their rates and services.
Title insurance is an important part of buying a property. It protects you from unforeseen problems and ensures that you have a valid and enforceable ownership right to the property. It is worth considering getting title insurance whether you are buying with a mortgage or with cash.
By John Figard: Senior Blog Contributor NowICanOwn.