Have you ever bought a home? If yes, you may know how exciting as well as emotional the moment is. However, it’s undeniable that the process is wrought speaking of money, especially during closing. From property taxes to homeowner or lender’s insurance to title search fees- Here are some of the few costs included.
But, in the case of adding the additional fee for owner’s and lenders’ title insurance, people often ignore it. We guess you are no exception, right? Actually, every home buyer and lender should consider having title insurance during home purchases. Let us tell you why.
Why Should Every Homeowner and Lender Have Title Insurance?
For a one-liner, a lender needs a lender’s title insurance during a property purchase, whereas a homeowner needs an owner’s title insurance for added protection. In both cases, it ensures peace of mind at the time of closing and down the road.
On a detailed note, let’s start with understanding the differences between owner’s title insurance and lender’s title insurance.
While buying a new home, lenders require buyers to pay for the loan policy, also known as lender’s title insurance, protecting the loan amount and the lender if any title issues arise at the time of closing once the deal is finalized. Even if a title company helps you ensure the property you buy is lien-free and clean without errors and easements. Still, lenders can face unexpected issues sometimes. In that case, the home buyers are responsible for the insurance coverage to ensure the borrowed amount and the lender is safe.
On the contrary, the lender’s title insurance doesn’t protect the homeowner. They need a separate policy, also known as owner’s title insurance, with no monthly premium! It’s a one-time fee! Home buyers should consider purchasing it to have added protection to their new home and keep their investment secure.
However, there are other reasons to consider buying owner’s and lenders’ title insurance. Such as:
Deals with unexpected issues and ownership claims-
The title company looks for potential claims during the title search before you buy the property. Although the process sounds unfailing, there remains the chance of showing up heirs to claim against the home you are purchasing. Such issues of family disputes, inheritance claims and multiple wills can cause trouble to the deal. Whether you are connected or not with the previous property owner, you will get involved in this struggle.
Having owner’s title insurance will deal with such unexpected claims and fight for your rights. On the other hand, a lender’s title insurance will help you protect the amount you borrow and the lenders.
Property rights protection
Despite undertaking a title search process by a title company to uncover liens, heirs, litigations and other factors, variations exist. Yes, you can find different kinds of insurance for your new home, but none can protect your property rights and investment in your home and against ownership disputes better than the owner’s and lender’s title insurance.
Also, there can be fraudulent claims against your property title where these insurances can actually give you peace of mind, ensuring there are no unforeseen ownership claims against your home.
Title frauds are quite common across the country, and their numbers have increased, indeed! It usually occurs for abandoned properties in the form of forged deeds. Criminals keep waiting just for a chance to con the homeowners, at the same time lenders, by signing a false sales agreement over their property title. Owner’s title insurance allows property owners to stay safe against fraud and historical issues before purchasing a home.
When it’s about property rights, title and deeds, it’s wise to be well aware of all the probable frauds and speak with a professional title insurance company to keep your home, lenders and amount of borrowed money protected. Need help? Count on us!
At Canada Title Monitoring, we ensure added protection to your investment and lenders during home purchases and sales with owner’s and lender’s title insurance. Our experts can help you ideate property valuation, and title monitoring the latest changes through our Title Tracker (SAAS software).