subject: Should You Have Title Insurance? [print this page] Title insurance can be a very good investment. In short, it provides you with protection should someone else step forward and try to take ownership in your home after you've footed the bill for it. This can happen due to mistakes on titles and a missing link in ownership in the property's history. When you buy a home, you will go through a process which looks at all titles of the piece of real estate and tries to ensure that there are no mistakes or missing links, but that's not always possible to do.
Why So Many Use It
There are many risks, both strange and understandable that can arise from home ownership. One of those risks is that someone will step forward and try to make a claim on your home, which is when title insurance can help you to avoid financial loss. For example, if a bill didn't get recorded properly at the department of taxation in the local county, this simple mistake could place your ownership at risk if a lien is placed on the home. What about someone who has a false identity stepping in, or a spouse of that person? What if a long lost heir to the person who owned the home before you comes forward with claims on the property? It can happen.
Lenders Require It
Lenders coverage is often a type of title insurance that your lender may require. This will provides some protection, not for you, but for the lender, in cases where some has a rightful claim on the real estate. It generally only offers protection up to the original amount of the mortgage. If someone does come forward and makes such a claim, you don't owe the lender anything if it's proven in court. That's a good thing for you since if you didn't have this protection, the lender could hold you responsible for the debt.
Owner's Coverage
Though lenders coverage doesn't sound like anything beneficial to you, owner's coverage is. As you become more of the owner of the property and build up equity in the real estate, this type of product can help to protect your equity. Keep in mind that someone can step forward at any time of your ownership, even 10 years after you buy the home. Having this protection is a good idea for just that reason.
Should you have title insurance? Most of the time it is a good idea. After all, you don't want to spend the next years paying off a mortgage on a home that someone else thinks is theirs. Though court cases can get expensive, you may be out of luck if this other person has a real claim.
by: Alfred Ardis
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