The FAQs of Title Insurance for Homeowners

Title is your right to own or use your property and establishes any limitations on those rights.

A title search is an early step in the homebuying process to uncover issues that could limit your rights to the property. If a title issue is discovered, most often your title professional will resolve the issue(s) without any further actions from you. After the title search is complete, and issues are resolved, the title company can provide a title insurance policy.

If you’re buying a home, title insurance is a policy that protects your investment and property rights for as long as you own your property.

There are two different types of title insurance: an owner’s policy and a lender’s policy.

1. An owner’s policy is the best way to protect your property rights. Either the buyer or seller may pay for this policy. Ask your title professional how it’s handled in your area.

1. A lender’s policy is usually required by the lender and only protects the lender’s financial interests. The buyer typically pays for this policy, but that varies depending on geography. Ask your title professional how it’s handled in your area.

Owner’s title insurance protects your investment in your property from certain future legal claims regarding ownership of your property. This one-time fee you and your heirs receive coverage for as long as you own your home. The owner’s policy also covers potential legal fees and court costs for settling claims covered by your policy.

Sometimes undiscoverable defects can come up after the title search. Under an owner’s title insurance policy, you are protected against certain undiscovered errors in the title.

Title issues include unknown:

• Outstanding mortgages and judgments, or a lien against the property because the seller has not paid his taxes.

• Pending legal action against the property that could affect you.

• Unknown heir of a previous owner who is claiming ownership of the property.

Unforeseeable title claims include:

• False impersonation of the true owner of the property

• Forged deed, releases or wills, Instruments executed under invalid or expired power of attorney.

• Undisclosed or missing heirs; Mistakes in recording legal documents.

• Misinterpretations of wills Deeds by persons of unsound mind.

• Deeds by minors.

• Deeds by persons supposedly single, but in fact married.

• Fraud

• Liens for unpaid estate, inheritance, income or gift taxes.

Your owner’s insurance policy lasts for as long as you or your heirs own your property. Your life will change over time, but your peace of mind never will.

Closing is the final step in executing the homebuying transaction. It is the process that allows the transfer of ownership to occur. Upon completion of the closing process, you get the keys to your home!