Title Insurance Basics: Everything You Need to Know About Title Policies. Preparing to buy a new home can be overwhelming.
And once you’ve finally found the right one, closing is still a complicated process. Plus, few buyers are aware of basic terms—much fewer specifics. However, aspects of title insurance (a relatively new product in Canada) can mean the difference between a satisfactory transaction resulting in ownership of a new home—and financial ruin. So what exactly is it? Title insurance is a contract used to reimburse loss or damage due to problems concerning the ownership of property, including title defects, liens against the property, undisclosed heirs, and more.
Though the buyer pays for both, lender’s policies are required whereas owner’s policies are optional. But before either policy can ever be issued, there is one vital step: Title Search Title searches are one of the very first steps in the real estate closing process. Once identified, some of these issues can be resolved. That’s where your title insurance policy steps in. Lender’s Policy. What is Title Insurance and Why Do You Need It? You understand the benefit of car insurance and homeowners insurance, but chances are you’ve never thought about title insurance until you started the process of buying a house.
What is title insurance? It’s a policy that insures that you won’t have any unknown claims made to the ownership of your home. What could go wrong? A clean or clear title is important because the title is what gives you ownership of a property. Imagine buying your dream home, closing the deal and then realizing the previous owner hadn’t paid property taxes for several years. An ounce of prevention Unlike most insurance policies, you pay just a one-time fee and your property is covered for as long as you or your heirs own it. As you’ve probably guessed by the one-time fee, title insurance doesn’t work the same way most other policies do. In some areas, the cost of the title search and the title insurance are separate, while in other regions they are lumped together.
What kinds of policies are there? Shop around. What is Real Estate Title Insurance. Title Insurance. The Role of Title Insurance in Real Estate Transactions. Title insurance is an important—and sometimes misunderstood—aspect of real estate transactions.
Even if the parties to a deed do not plan to purchase title insurance, it is important that the deed meet title insurance requirements. Many people assume that if a deed is valid under state law and meets all recording requirements, there is nothing to worry about. This is not always the case. There are two different sets of requirements that apply to real estate transfers. First, there are legal requirements. The second group of requirements is practical requirements. What is Title Insurance? Title insurance is a special type of insurance that protects the insured from financial loss relating to problems with title to real estate. If a lawsuit arises due to any of these issues, the title insurance company will defend the lawsuit and, if the title insurance company loses the lawsuit, pay any claims relating to the lawsuit.