WHAT IS TITLE INSURANCE?
Purchasing a home or any type of real estate is often one of the largest financial investments and commitments made in a lifetime; title insurance was created and designed to protect that investment and your rights of ownership.
In other words, it provides peace of mind and, more importantly, financial protection for any damages or defects a property owner incurs as a result of unforeseen legal issues involving the title or ownership of the property. An owner’s title policy is paid for once during the closing process, and will stay in affect as long as the insured party or their heirs have an interest in the property.
In addition to an owner’s policy, which protects against title defects that affect ownership rights of the property, there’s also a loan policy, which protects against title defects that could affect your lender’s mortgage on the property.
WHY DO I NEED A TITLE POLICY?
In a lot of cases, a lender or mortgage company will require you to purchase a title policy, but even if that’s not the case, it never hurts to minimize your risk of purchasing real estate and ensure your rights to ownership. There are several unknowns that could arise that an owner’s policy ultimately will protect against. Examples of these unforeseen issues are:
– Documents Executed Under Duress
– Defective Acknowledgments
– Deeds Signed by Minors
– Inadequate Legal Descriptions
– Mistaken Reports Regarding Taxes
– Misinterpretation of Wills
– Errors in the Tax Record
– Undisclosed or Missing Heirs
– Forged Deeds
– etc…
Any one of those problems could wreak havoc on your bank account, and leave you questioning your purchase instead of enjoying it. Although this is coverage may seem trivial at the time, it could truly save you in the long run.
LET’S TALK TITLE INSURANCE COST
So how much will this hurt your wallet? Honestly, it really depends on the state, but as mentioned above, it is typically a one time cost, and in the State of Texas, the Title Policy Premium is regulated and based on the purchase price of the property; meaning, regardless of title company, your policy price will be the same. A list of those premiums and how to calculate them can be found here.
More information can be found on the Texas Department of Insurance website, and be aware, this information that we have offered as a brief description of coverage is meant for educational purposes only. If you would like more information or have specific questions regarding title insurance, please contact your local Carlisle Title office.
I think that a property foreclosure can have a major effect on the client’s life. Real estate foreclosures can have a Seven to ten years negative effects on a client’s credit report. A new borrower having applied for a home loan or almost any loans for example, knows that your worse credit rating will be, the more hard it is to secure a decent personal loan. In addition, it could possibly affect the borrower’s capacity to find a decent place to let or rent, if that will become the alternative homes solution. Interesting blog post.