What is Title Insurance?
Let's start by clarifying what a 'title' is. A title is the legal document that provides proof of ownership for a property. Title insurance, therefore, is an insurance policy that protects property owners and lenders against any loss or damage occurring from liens, encumbrances, or defects in the title or actual ownership of a property.
You’ve found your dream home, and you’re eager to finalize the deal. You might think, "Why do I need another insurance policy?" Well, imagine discovering later on that there are unpaid property taxes from a previous owner, or worse, that the person who sold you the property wasn't the legal owner. Scary, right?
Types of Title Insurance Policies
- Owner’s Policy: This protects the property owner against title defects that could affect ownership.
- Lender’s Policy: This safeguards the mortgage lender's interest in the property.
What Does Title Insurance Cover?
- Unpaid Taxes and Liens: Helps you avoid responsibility for previous debts attached to the property.
- Legal Fees: Covers legal costs in case of title disputes.
- Ownership Issues: Provides protection against claims from third parties.
Ideally, title insurance should be obtained during the closing process. However, it’s always best to consult with your trusted real estate advisor for personalized guidance.
The cost varies depending on your location and the value of the property. It’s a one-time fee typically paid at closing.
While the concept of title insurance may seem daunting, it’s one of those things better to have and not need than to need and not have. A title issue can turn your real estate dream into a nightmare, making title insurance a 'T' you don’t want to overlook in your real estate journey.
Akevia D.
eXp Realty
Realtor
202-436-0044
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