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When it comes to title insurance fees, coverage, and other important policy facts, many homeowners don’t know the details. In some cases, the act of buying may seem so daunting that they may skip the important step of insuring their investment. In fact, this simple step can save some homeowners thousands of dollars, making it a worthy part of the process that shouldn’t be missed. If you’re thinking about buying a home, read these answers to frequently asked questions so you can protect your most valuable asset.
What is title insurance and why do I need it?
In some cases, property owners are shocked to learn that someone else has a lien or some sort of claim on the home they just bought. By insuring your property purchase, you will be protected against claims that others make on the home and, if necessary, will be reimbursed for any financial losses.
How is it possible that such outstanding liens or claims can be attached to a property after it has been sold?
Transfer of property has been going on in the United States for over 200 years. Over the years, transfers have been recorded and re-entered in books, paper files, and now, computers. Sometimes mistakes are made as records are consulted, copied and moved. In many cases, these types of mistakes can be attributed to human error. Other circumstances result from fraudulent activity, such as when a person acts as the owner of property when he or she is not the actual owner. Other frequent issues include unpaid real estate taxes, forged signatures, or incorrect property descriptions.
How long does a title last?
It remains in effect and protects your investment in your home for as long as you own the property, whether it’s for a few years or several decades.
How much are title insurance fees and who pays for them?
Title insurance fees vary from sale to sale, depending on the value of the home. In some cases, the seller and buyer split the costs of the policy, although it is often considered the sole responsibility of the buyer. This is usually included in the closing costs, so the buyer doesn’t need to worry about additional out-of-pocket expenses.
How often does the homeowner pay the fee?
These are paid only once, when the policy is chosen. Many people believe that this is the most important investment a homeowner can make when buying a new property.
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