Every first time homebuyer will feel the stress and overwhelming pressure of buying a new home. Even for an experienced homebuyer, purchasing a home can be an intimidating undertaking. Regardless if you are a first timer or a repeat buyer, one of the most overlooked aspects of purchasing a home is the role of title insurance.
Title insurance is a very important investment; here is some information regarding its role in the home buying process.
What is Title Insurance?
Title insurance protects homeowners and lenders from property loss or damage they could experience from liens or defects in the property’s title. Title insurance is a one-time fee paid by the buyer at the time of closing. Title insurance rates differ based on the value and location of your home. Title insurance is not mandatory, but it is very highly recommended.
Who is Title Insurance For?
Homeowners and lenders need title insurance. This insures them against various possible title defects on a property. Prior to closing, the insurance company will run a title search on the home. This typically takes between two and three business days and searches often reveal a problem that must be resolved before closing.
Liens or defects on the title can include tax liens, abstracts of judgment, child support liens or bankruptcies. A lien means another company or person has the right to keep possession of your property until your debt is repaid. Without title insurance, the new buyer would be responsible for clearing any defects that are on the property.
If you have questions about title insurance, please reach out to one of our experienced loan officers!