Tucked in among all your other closing costs when you buy a house you'll probably find a charge for "title insurance". If you're taking out a mortgage to buy a house, your lender will insist that you take out title insurance. This is more than just one more nuisance charge levied by people who are determined to make a few extra bucks on your home purchase. Title insurance offers you some real, tangible security in the event that there's ever a problem with the title to your home.
But I thought that's what the title search was for...
When you agree to buy a house, you want to be sure that the person selling it to you actually has the legal right sell it. The information about who has rights of ownership to a piece of property may be scattered in all sorts of different places. The way that you find out who can buy and sell the property is to hire an experienced researcher who understands all the things that can affect the transfer of a title from one owner to the next.
Because the information is so scattered, though, there is always the chance that some little bit of information might not be recorded or found.
Really, though, what could go wrong with a title?
Let's just say, you'd be amazed. We've heard stories that range from the bigamist's first wife having a claim on the house to the fast-talking con artist who forged ID papers and sold a family's home while they were on vacation. Most title disputes have far more boring causes - an old homeowner's loan that wasn't paid off, a clerk's mistake in filing a document or a dispute arising from a mismarked property line.
So what does title insurance cover?
When you take out title insurance, the insuring company will do a full search of the title records to be sure that they are free and clear, but there's always the possibility that they missed something. If they did, they promise to pay any costs arising from the title challenge and to reimburse you for any losses you incur because of it. In other words, if someone does show up with a claim against your deed, the insurance company will pay the legal costs of defending against the claim. If you lose, they will pay off the cost of the house.
Okay, so what's with the "lenders insurance" and "buyers insurance"?
There are two kinds of title insurance. Mortgage lenders require only that you buy "lenders insurance" because they're looking out for THEIR interests, not yours. In the event that a successful claim is made against your ownership of your house, lenders insurance will pay them any money outstanding on your mortgage. You, however, are out any money that you've already paid on the house, including your down payments.
Owners insurance covers the entire purchase price of the house. If there is a claim against the property, the insurance company will reimburse you any money that you've already paid toward your mortgage and pay off the remainder of the mortgage so that you're not liable for continuing to make the payments on a house that you don't own.
How do I pay for title insurance?
You'll pay for title insurance as part of the closing costs of your house. It's a one time premium that will cover you for as long as you own your home, as long as the claim arises from something that happened before the title search was done. There are no monthly payments - pay once, and you don't have to worry about it again.
It's worth it, wouldn't you say?
Listed below are more articles related to the above article from the "Insurance" article category.
People interested in the above article "What Do You Mean It's Not My House? - Why Title Insurance Is More Than Just Another Good Idea" are also interested in the related articles listed below:
With current consumer right awareness at an all time high, every professional needs to take protection against disgruntled and dissatisfied clients. Professional Insurance has moved from being an option to being a priority.
One of the most important parts of an insurance claims product is the document management and storage. It starts out with the basic paper flow procedures and document storage, which until recently was the old cabinet filing system and for many still is.
Annual Travel Insurance, looking for a low cost one? Are you planning a ski trip or golfing getaway? Maybe you are going to check out the world with nothing but a rucksack and a two-man tent on your back? Whatever break or holiday break you have got planned, you will certainly require travel insurance.
Look around. Can you name the brands you see? Of course you can. Everything from the water we drink, the cars we drive, and the insurance we use has been branded. Huge corporations dominate many of the markets today. Mom-and-pop businesses keep dwindling, and it has been said that bigger is better. Is it?
Soon after people became sensitive towards themselves and cautious towards their valuables they started feeling the need of keeping things safe from any unforeseen events and this concept was immediately characterized as insurance. The concept of insurance was not limited only to us but also to all those objects which prove to be our better- half in many ways. So to name a few in aforesaid categories, car, auto or homeowner insurances are fine examples.
Living in the modern world today it is almost impossible not to own some kind of mobile electronics. Cell phones have become commonplace even in impoverished third world countries. Laptops, digital cameras and MP3 players are also wildly popular and have made their way into all countries and societies. These devices have become an integral part of our daily lives.
In the modern day both men and woman are increasingly purchasing jewelry. Although the price of certain types of jewelry has come down, these items remain quite valuable. If you have home contents insurance, you may think that you are fully covered if something happens to your jewelry.
