Term Life Insurance – Home Buying Guide – What is Title Insurance?
Buying a home is a long process and involves many steps. For this question, first home can quickly become overwhelmed by the whole process. Additional fees and costs can quickly accumulate. In addition, the pressure to obtain affordable housing in the housing markets overpriced student stress levels. Because home purchases are huge investments for the mortgage lender and home, the different types of insurance are needed to protect both parties. Typical insurance include mortgage insurance, PMI, hazard insurance, etc.. Even if you have never financed a home, you’re probably familiar with this type of house insurance. However, there is another type of insurance, which is just as important – title insurance.
What is title insurance?
Ordinarily if a product is purchased and the buyer pays in cash or arranges financing, the question becomes their possession. Home purchases are no different. On the other hand, if the title is ask questions, customers may lose their homes. New construction of houses rarely have issues of title, unless there are problems with land ownership. Because the houses are constantly being bought and sold, ownership is constantly evolving. Before a house is sold and transferred ownership to the buyer, the original owner must consent to the operation.
Unfortunately, some houses are sold without the consent of the original owner. Situations such as divorce, condominiums, undisclosed heirs, and so on in May because of potential title issues.
For example, say, a couple bought a house together and then separated or divorced. Even if a part is separated and no longer contributes to the monthly mortgage payments, his name will remain on the title unless removed.
If the house is sold without the former on the knowledge he or she has the right to challenge the transaction charged to the new owner.
Benefits of Title Insurance
Acquiring title insurance is required by the majority of mortgage lenders. There are two types of insurances. One is purposed to protect the mortgage lender, while the other type protects the homebuyer. The homebuyer is responsible for paying for both policies. In a nutshell, title insurance protects both parties against legal claims against the property. Unlike other insurances that provides protection against possible future events, title insurance protects against past events. Therefore, any mistakes or flaws concerning the title will not result in the homebuyer losing their home.
Title insurance is inexpensive. Furthermore, the policy is only paid once, with no renewals or expiration dates. Thus, the policy will remain active for as long as you own the property.