Title insurance safeguards property buyers and mortgage lenders against any loopholes in the title whenever there is a transfer of the ownership of a property. If there is any tittle dispute when a sale is done, then a title insurance company will take care of reimbursing the mentioned legal compensations depending on the type of policy. A record of the deeds may not be accurate in all the record-keeping which may give rise to the situation where a person with an older document can press a claim on the newly bought property if there is an indication of any previous frauds or forgery issues. Title insurance will take care of fixing your tittle rights or give you the reimbursement if there is a situation of loss of property. You may have the big question mark revolving around your thinking. How long is the title insurance good for? Title insurance coverage starts from the moment you buy the policy and covers indefinitely into the past, for both known and unknown discrepancies in the documented past of the ownership. It will protect losses up to the maximum coverage set out in the policy and also cover most legal expenses related to restoring your property’s title. Therefore, ensure to protect your property from Title Guarantee, Utah’s leading title insurance company.
What are the Different Types of Title Insurance?
There are two majorly two kinds of title insurance policies:
1) Owner’s Policy – This policy safeguards the property owner from different kinds of title-associated damages that are mentioned in the insurance policy until the property is owned. Each owner’s policy has a defined maximum amount of coverage.
2) Lender’s Policy – This safeguards the lender from damages in the situation where the property’s mortgage is illegal. A lender’s policy will have coverage for the quantity of the property’s total mortgage.
Obtaining a lender’s title insurance is a compulsory step in the mortgage process. It will safeguard the lender’s interest in the property for a time until the loan is paid off. But it is a wise plan to procure a title coverage even for the homeowner as it will cover for losses and legal expenses in many situations as mentioned below for a time until you are the owner of the property.
What are the issues covered by title insurance?
- By paying a onetime fee, termed as premium, a title insurance policy will give shielding from discrepancies like:
- Unknown Title defects that may refrain you from having complete ownership of the purchased property.
- Prevailing liens against the title from the former owners like uncleared debts from any services, mortgages, taxes or co-operative society charges against the property.
- Any encroachment problems like the removal of any structures in your property that has to be eliminated since it is under the ownership of your adjacent party.
- Frauds in the title.
- Faults in any public records or surveys.
- Any other title-associated problems that can disturb your capability to hypothecate, sell or lease the property currently or in the future.
The definite number of claims paid for the title insurance buyers is very less, but looking at the limitless kind of property recording in the country implies that the value of title insurance is very much in saving you lots of capital in any case of discrepancies.
The chance of faulty title increases if you buy a disputed or foreclosed property. Even in such situations, title insurance may reimburse you for the loss of complete property.
What issues are not covered by Title Insurance?
As there are many advantages of title insurance, you should be aware of all the coverage points that are provided in the policy. Make sure to read the policy thoroughly for some exclusions like,
- Known title issues that are exposed to you before purchasing the property.
- Any environmental issues.
- Claims for the native land.
- Any issues that may appear after the new inspection or the latest survey of the property.
- Any issues that are not recorded in public records and thus not mentioned in the insurance policy.
- Any renovations or additions to the property that are done by you that result in zoning guideline violations.
Hence it is very important to read the title insurance policy carefully as it may have an extra list of exclusions, restrictions, and terms and conditions that are particular to your property.
It is also very important to note that title insurance will not cover the nontitle associated problems such as-
- Issues caused by floods, draining holdup or fire.
- Repair or replacement of any general parts of the property.
- Any theft at the property.
How Much Does Title Insurance Cost?
Generally, compulsory lender’s title insurance charges range from $500 to $1,500, depending on the state that the property is located and what is the total amount of capital borrowed for the home loan. There are few locations where insurers require to perform lots of verifications for the history of the title that may influence the final cost of getting the policy. A homeowner’s title insurance is usually costlier than lender policy. It may cost around $700 to $2,000 for getting a homeowner title insurance. If your loan amount is more with small down payments then it can significantly raise the charges.
You may feel to skip this homeowner’s title insurance policy but considering that the policy will remain until you have the ownership of the property and the protection it provides against many issues related to title, it is advised to surely procure it.
Bottom-line:
A real estate buying generally is the major financial investment you may ever make. Hence, when you purchase an owner’s policy of title insurance, you are even getting the peace of mind along with the policy. Before going to finish the transaction, investigate the title insurance protection and be very sure to shield your property by associating and taking the guidance of Title Guarantee, Utah’s leading title insurance company.