As you consider the many forms, documents and decisions that must be considered during the process of purchasing a new home, you may feel like title insurance is not worth your attention. However, title insurance can be an invaluable part of your closing, and it is relatively simple to acquire. Unlike most other types of insurance that are paid monthly, you can secure a policy for a one-time fee at closing, and it will protect you from a wide variety of potential issues with the title of your home. Some of the most common risks covered by title insurance include the following.
Forgery And Other Types Of Fraud
Fraud is more common than you might think in the real estate world, and a wide variety of potential forgeries can occur. For example, the deed to your property itself could be forged; more commonly, however, transfer documents may be forged that allow a home to be sold by someone who does not actually own it. Wills are another fairly common source of forgery troubles, but no matter the scenario, those without title insurance could be faced with hefty costs to defend their claim to the home that they purchased.
Liens On The Property
Perhaps one of the most frequent uses of title insurance is to protect the buyer from previously unknown liens on the property. A lien is a claim that another party still has on your property; the lienholder can range from the government (if you fail to pay taxes) to a mortgage lender if the owner defaults on payments.
Failure to pay child support or other debt can also result in liens on the property. If these are not uncovered before the property changes hands, the new owner will be responsible for any liens still on the home, even if they were not the ones responsible for the lien placement in the first place. Title insurance can protect you from this scenario.
Adverse Possession Claims
In some situations, other people who have not purchased a property can still make a claim to live there. Most commonly, this happens when a squatter has lived at a location for long enough without being evicted that they may claim legal rights to the property. This is called adverse possession, and some types of title insurance will protect you from the potential for adverse possession claims.
Previously Unknown Heirs
Another common issue with a property’s title can arise when heirs that have a claim to the property are not known prior to purchase. In order for a property to change hands, it must be granted with the consent of all involved parties; if a previous owner’s children, who were granted the home in a will, agreed to the sale but you learn after the purchase that a child from a previous marriage wants to claim the home, this formerly undisclosed heir could succeed in claiming the home from you, even if you successfully purchased it.
Similarly, issues with wills and the home being bequeathed to multiple people could threaten your claim on the home, resulting not only in the risk of losing your home but also in unnecessary expenses related to defending your claim legally. Title insurance is designed to safeguard you against this possibility.
Boundary And Zoning Disputes
Depending on the type of title insurance that you acquire and what its provisions are, you may also be protected against issues with the boundaries of your new property. If you attempt to do work on a fence or cut down a tree that you believe is on your property only for your neighbor to demand remuneration because they believe that those objects are on their property instead, title insurance can help you to defend against such disputes and even help you understand how your property is zoned and where the boundaries are. However, be sure to confirm what coverages your title insurance policy includes and work with an expert to craft coverage that is best suited for your needs.
Trust The Experts To Help You Understand Your Title Insurance Options
Whether you are considering title insurance for the first time or you would like to begin the process of customizing a policy that is right for you, you do not need to approach the process on your own. The professionals at Mathis Title Company would be happy to answer any questions that you may have and help you to get started on a title insurance policy. Reach out to learn more or to schedule an appointment to secure title insurance to protect your property purchase during closing and beyond.