What is title insurance and why it is needed or highly recommended?
Title insurance is very important for home buyers because it protects you as a buyer and the lender from the possibility that your seller or previous sellers didn’t have free and clear ownership of the property and cannot transfer full ownership of the property to you. In a typical purchase transaction, you may need to purchase both owner’s and lender’s title insurance. While owner’s title insurance is optional, a title insurance policy provides the new owner some assurance of free and clear title in lieu of proper survey of the property.
Lender’s title insurance protects the lender up to the amount of the mortgage, but since it doesn’t protect your equity in the property. It is highly recommended that you buy owner’s policy for the full value of the home in order to protect your equity. If you’re taking a mortgage on your property, your lender will generally require you to buy a title insurance policy for lender to be ensure that the property has a clear title.
Title insurance offers financial protection against most problems in regards to the title that may not be found in the public records or are missed during title search process that may lead to fraud or forgery in the future.
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