Title insurance is designed to protect both homeowners and mortgage lenders in the event that there is anything wrong with the title to a new home. If you’re paying for your home in cash, with no loans or lenders required, title insurance can seem like an unnecessary expense. A common question is whether or not you need title insurance during a cash transaction. The short answer is yes! It can help new homeowners protect their investment and their savings both at the time of purchase and in the future. Here are a few of the potential issues that title insurance can help you resolve:
Inaccurate Title Reports
Title reports contain the legal description of your property’s location and boundaries, any taxes due or paid on the property, and any liens on the property at the time of the sale, among other important information about the property and its legal condition. These taxes and liens must be paid and removed before the sale of the home can be completed. Inaccuracies in this document can make it impossible to determine whether the title can legally be transferred, stalling the home’s sale and costing you money.
Homeowners may have a lien placed on their property if they owe a debt that has not been paid. After the debtor has attempted to settle the debt, they can place a lien on the home to ensure payment. Liens include property liens, tax liens, mechanic’s liens, and even credit card debt. Unresolved liens render the title defective, and in some instances, a home cannot be sold until the proper fees are paid, allowing for the lien’s removal and clearing the way for the sale to officially close.
A defective title can therefore stall your purchase indefinitely. The property’s current owner must pay the lien before the sale can proceed, and if they are unable to do so — or if your home is purchased in a foreclosure or at an auction, after the owner has already relinquished control of the property — you may become responsible for the payment. With title insurance, you can avoid this extra expense, as the policy will help cover the costs and allow your sale to continue.
Future Claims on Title Insurance Policies
Title insurance does more than protect you during the purchasing process. It can also be used after the sale has been completed to help you deal with unexpected claims. Examiners do their best to thoroughly research documents relevant to a home’s purchase to discover any liens, taxes, and other potential issues before the sale is completed. However, there are instances in which new information is discovered after the sale. These are typically not a matter of public record, and could include forgery, impersonation, and other unknown errors that only come to light later.
Title insurance protects you if future problems arise with your home. If problems with your home’s documentation are discovered later for any reason, title insurance will help pay for legal fees and other expenses incurred as you rectify the situation. Without it, you will be responsible for paying the full amount of these, damaging your savings and threatening your home ownership. Title insurance can give you extra peace of mind that if a sudden claim is made on your title, you’ll be able to pay for it and handle it with the professional and financial support of a title company and title insurance.
Title Insurance in Northern Virginia
Speak to Mathis Title Company for more information about title insurance and how you can protect your investment in your new home. Robin Mathis has extensive experience in both the legal and real estate industries, providing her with unique insight and skills that simplify the home buying process. Her company can assist with title insurance, contract preparation and review, settlements, refinancing negotiations, and liens, making it an all-inclusive resource for home buyers looking for thorough and professional support. Mathis oversees each closing herself in order to give every client personalized attention and individualized solutions to their home buying needs.