What is Title Insurance?
What is title insurance?
Title insurance is protection against loss if a defect is found in your title. When a property is purchased, the purchaser is given a title to the property that generally means they have legal ownership. However, sometimes there’s a hidden defect from a prior sale, mortgage, will, etc., that may give another party a valid legal claim against the property.
Who should be protected?
LENDER – When a property is purchased and the person is using a lender to borrow money, that lender will commonly require the buyer to purchase a lender’s title insurance policy. This covers the outstanding balance on the mortgage for the lender in the event of a defect but doesn’t cover the buyer.
BUYER – When acquiring property, it is recommended for the buyer to purchase an owner’s title insurance policy as it will provide maximum protection in the event that there is a claim against their property. A title insurance policy enables the buyer to enjoy peace of mind in protecting, often times, their largest asset.
What is a title search?
The title search is the first step in obtaining title insurance. It is a detailed examination of the records concerning the property including deeds, tax records, civil and probate court records, etc.
The purpose is to verify/ensure that the seller ha the right to transfer ownership. The purpose is also to find any claims, errors, debts, assessments, or other restrictions on the property.