WHEN IT COMES TO YOUR HOME, BETTER SAFE THAN SORRY

A clear title to the property you’re buying is essential to completing the transaction and taking ownership. In some cases, unknown issues can arise during the title transfer process; this is where title insurance can protect you and your mortgage lender. Read on to learn more about title insurance—and why it’s essential to have if you’re purchasing a home.

Title insurance is a policy (or policies) you can purchase to guarantee your right to ownership of the property you’re buying. It protects you from problems if:

• It is found that someone else actually owns the property you’re purchasing.
• There were errors in documentation or record keeping.
• There have been restrictions placed on the property that haven’t been addressed already.
• There are lawsuits or other judgments affecting the property.

These situations can be damaging if you don’t have insurance, since you can then be held liable for others’ mistakes. If you have title insurance, however, it’s not your responsibility to handle any title problems that may come to light.

Your lender will probably require you to purchase lender’s insurance, which covers them in the event of any unforeseen title problems. It’s a good idea (even if it’s not required) to purchase a plan that covers you as well (owner’s insurance). Your buyer’s agent and lender can discuss the process with you and help you make the best decisions to protect your investment. Although it’s unlikely that problems will arise, it’s better to have insurance and not need it than to not have insurance and find yourself in a pickle!