Buying a home is a major investment, and protecting that investment is an important part of the closing process. Homeowners insurance may be one of the first protections that comes to mind, but there is another type of coverage buyers should understand: title insurance.
What Is Title Insurance?
Title insurance is designed to protect against certain covered problems involving ownership of a property.
Before closing, a title search is performed to review public records and identify potential issues. However, not every title problem is easy to discover. An issue connected to the property’s past could potentially surface after you have already purchased the home.
That is where title insurance comes in.
What Types of Problems Can Occur?
Depending on the policy and circumstances, title issues could involve previously unknown heirs, mistakes in public records, certain liens, improperly executed documents, or other defects affecting ownership.
These issues may have originated years before the current buyer entered the picture.
Owner’s vs. Lender’s Title Insurance
There are generally two different types of title insurance involved in a real estate transaction.
A lender’s policy protects the lender’s financial interest in the property and is commonly required when financing a home. An owner’s policy protects the homeowner’s interest, subject to the terms and exclusions of the policy.
A lender’s policy does not provide the same protection for the buyer, which is why it is important to understand the difference.
Protecting Your Investment
You put significant time, money, and effort into purchasing a home. Title insurance can be an important part of protecting your ownership from certain unexpected issues tied to the property’s past.
Have questions about title insurance or an upcoming closing? Contact Crest Title Company to learn more about the title process, available coverage, and how our team can help with your next real estate transaction.