Do I Have To Buy Title Insurance?

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Title insurance, a primarily American product, provides indemnity to lenders and homeowners against defects or issues with the title of a property.

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Presentation Transcript

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BEFORE CLOSING IF PAYING CASH DO I HAVE TO BUY TITLE INSURANCE

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TITLE INSURANCE A PRIMARILY AMERICAN PRODUCT PROVIDES INDEMNITY TO LENDERS AND HOMEOWNERS AGAINST DEFECTS OR ISSUES WITH THE TITLE OF A PROPERTY. WHEN YOU PURCHASE A PROPERTY BY SECURING A MORTGAGE YOUR LENDER WILL REQUIRE YOU TO PURCHASE A POLICY OF TITLE INSURANCE TO PROTECT THE LENDER’S INTERESTS IN THE PROPERTY.  HOWEVER IF YOU ARE PAYING FOR A PROPERTY IN CASH THIS POLICY WILL NOT BE APPLICABLE TO YOUR TRANSACTION. THAT SAID YOU STILL HAVE THE OPTION TO PURCHASE TITLE INSURANCE FOR YOURSELF.

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M a n y p r o p e r t y o w n e r s o p t t o p u r c h a s e t i t l e i n s u r a n c e t o p r o t e c t t h e i r o w n i n v e s t m e n t i n t h e r e a l e s t a t e . A l t h o u g h a n o w n e r ’ s p o l i c y i s a n o p t i o n a l p u r c h a s e i t c a n b e a g o o d o p t i o n t o h e l p p r o t e c t y o u r o w n e r s h i p r i g h t s . Y o u w i l l p a y f o r t h e o w n e r ’ s p o l i c y a t t h e c l o s e o f y o u r t r a n s a c t i o n a n d t h a t c o v e r a g e w i l l l a s t f o r a s l o n g a s y o u o r y o u r h e i r s o w n t h e p r o p e r t y . OWNER’S POLICY

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O n e b e n e f i t o f p u r c h a s i n g a n o w n e r ’ s p o l i c y o f t i t l e i n s u r a n c e i s t h e s e a r c h a n d e x a m i n a t i o n t h e t i t l e i n s u r a n c e c o m p a n y w i l l c o n d u c t p r i o r t o i s s u i n g a p o l i c y . W h e n y o u o r d e r t i t l e i n s u r a n c e a t i t l e a g e n t o r o f f i c e r w i l l c o n d u c t a s e a r c h o f p u b l i c r e c o r d s t o d e t e r m i n e t h e s t a t e o f t h e p r o p e r t y ’ s t i t l e . O f t e n t h e s e p r o f e s s i o n a l s f i n d d e f e c t s o r “ c l o u d s ” i n t h e t i t l e a n d w o r k t o r e m e d y t h e m . I f t h e c l o u d i s v e r y s e r i o u s o r c a n n o t b e r e m e d i e d t h e t i t l e c o m p a n y w i l l a l e r t y o u t o t h e i s s u e . Y o u c a n t h e n d e t e r m i n e w h e t h e r t o p r o c e e d w i t h t h e t r a n s a c t i o n . SEARCH AND EXAM

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A l t h o u g h y o u w i l l n o t b e r e q u i r e d t o p u r c h a s e a l o a n p o l i c y o n a c a s h t r a n s a c t i o n i t ’ s a g o o d i d e a t o p u r c h a s e a n o w n e r ’ s p o l i c y . T h i s t i t l e i n s u r a n c e p o l i c y c a n f i n a n c i a l l y p r o t e c t y o u f r o m a n y p r i o r l i e n s o n t h e p r o p e r t y e n c u m b r a n c e s t h a t m i g h t r e s t r i c t y o u r u s e o f t h e p r o p e r t y - - s u c h a s a s e w e r o r w a t e r l i n e o r f o r g e r i e s a n d e r r o r s i n p u b l i c r e c o r d s . F o r i n s t a n c e t h e r e c o u l d b e a m i s s i n g h e i r t o a f o r m e r o w n e r o f t h e p r o p e r t y o r a d e e d t h a t w a s f o r g e d a n d n o w r e q u i r e s r e m e d i a t i o n w h i c h c a n b e c o s t l y . O r d e r i n g a n o w n e r ’ s p o l i c y o f t i t l e i n s u r a n c e c a n h e l p y o u n o t o n l y d i s c o v e r t h e s e i s s u e s b u t w i l l a l s o p r o t e c t y o u a g a i n s t a n y u n d i s c o v e r e d i s s u e s t h a t c o u l d a r i s e i n t h e f u t u r e . TYPES OF TITLE ISSUES Image Source: https://finance.zacks.com/buy-title-insurance-before-closing-paying-cash-5942.html Artesian Title

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