Are You Really Covered by Title Insurance?

Ensure that the house’s past isn’t coming back to haunt you. Title insurance offers protection to buyers from omissions and errors in their title search. This is a search that is carried out by Title Company going back several years so as to make sure that your house is not under any other ownership claims.

If you have paid title insurance while you were getting your louse loan, then you can think that the home is completely yours and the past history of the house will not come back to trouble you.

But one can be wrong

A man from Connecticut purchased a home and did not know that its previous sellers were having 2 mortgages outstanding on it. Last name of the seller was The First American Corp. When one loan out of the two was recorded, it had been misspelled as Taquil hence title search did not come up.

Seller continued depositing mortgage after selling the house till in the end he filed for bankruptcy. Lender tried foreclosing on new homeowner. If that man from Connecticut had deposited cash for the house, had paid off his mortgage already or built equity in house, the interest of his would not have been saved by title insurance policy of the lender- only his interest of Mortgage Company in the house would have been confirmed.

Misrecorded or misspelled names are not that unusual but title insurance is highly apt to protecting against issues like contractor’s liens and boundary disputes. Contractor’s liens is claim towards the house of yours filed by contractor or builder who was not deposited for work on your house. Any of the scenarios can come into action and can leave investment of yours vulnerable in case you are not having correct insurance type.

Basics of Title policy

Owner/lender

Virtually every lender requires you to purchase lender’s policy when one purchases a house for protecting their investment. There are few states or with few title companies, one may be purchasing an owner’s policy also without actually considering it as a section of long list of the closing costs. Some title companies or states will ask you if you want to purchase owner’s policy or one may never hear of its existence.

On average, lender’s policy runs around $800 to $1000 as well as is dependent on loan amount, as per current testimony before US House committee. Owner’s policy will add much more to the closing expenses of yours as per Ragan.

Unlike maximum other kinds of insurance, this is one-time charge; you don’t need to make yearly or monthly payments. The fee would cover lender but as long as mortgage is effective or till the owner owns the house.

How important is owner’s policy?

Since it saves equity that an owner has in his house- not the finance amount by bank that is covered by lender’s policy. But if you have inserted nice chunk of change on the house prior to getting mortgage for paying for the remaining, the owner’s policy would go a long way towards saving your investment.

About HUS

HelpUSell Properties is a website based on real estate services providing articles and resources in different topics such as 2nd mortgage, property for sale, appraisal, refinance mortgage rates, foreclosure, housing market, bad credit, and more for home owners and future home owners.

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