Buying a home tends to be a more complex process than it may first appear; from scheduling inspections to negotiating rates and liaising with lenders, you will likely have a lot on your mind. This makes it easy to forego some of the less commonly discussed protections during the home buying process, such as title insurance.
Electing to purchase title insurance can save you money in the long run and even protect you from unexpected loss years after your purchase. In order to understand whether title insurance is right for you, you must first learn more about what purpose it serves and why it exists.
What Does Title Insurance Accomplish?
Title insurance is an protection put in place for homeowners and buyers. It insures a policyholder against errors or issues with the title of a property. In the United States, the recorder of deeds generally does well at keeping track of all the requisite details about a property; however, sometimes not all of the details are clear-cut.
If someone suspects that fraud or forgery has occurred at some point in your residence’s history, you could be on the hook for the legal snag if you do not have title insurance. Outstanding issues such as legal judgments against a former owner or even a formerly unknown heir could jeopardize your ownership of the property.
Thus, purchasing title insurance means that your title is thoroughly reviewed to preemptively spot any issues that could result in fees or even the loss of your property later. And if unforeseen circumstances pop up at a later time, you are still protected.
Is Title Insurance An Additional Fee On My Mortgage?
Title insurance can benefit you for years to come, but that does not mean that you need to pay for it for years. In fact, unlike some other fees that are commonly attached to a mortgage payment such as PMI and escrow to accounts like property taxes, title insurance is not bundled into your mortgage.
You will pay the cost of title insurance only once, during the process of purchasing the home. Title insurance may be as inexpensive as $500 or range as high as $4000, largely depending upon the company you select and even how such insurance is handled in your state. Some states regulate the price of title insurance, so your rate may be relatively similar regardless of who you choose to work with.
The location of your home will be one of the most significant determining points as far as total cost, and if your home has experienced previous ownership issues (such as if you bought it during foreclosure), expect the process to be slightly more expensive and take a little longer.
Do I Need Title Insurance When Buying A House?
The question of whether you need title insurance is ultimately up to you. However, minimal cost upfront could save you years of legal headaches, fees and even the loss of your property, which is why many homeowners choose to purchase insurance. In fact, it is worth noting that the lender will always maintain title insurance to protect themselves in the event of an unforeseen circumstance, which may indicate that it is a wise choice for you as well. Just because your home purchase went smoothly or the property has been in the same hands for multiple generations does not mean that title insurance will be a pointless expenditure.
Which Title Insurance To Choose From
A wide variety of companies supplying title insurance is available, but a few chains dominate the national market. You can expect to see Fidelity National, Stewart Title, First American and Old Republican as the major title insurance providers nationwide.
You may shop around for other local options, but you can begin by applying for a quote from these larger companies to get a general idea of your anticipated costs. The seller or buyer attorney you choose to work with will likely have their own recommendations for title insurance companies that are reliable, so be sure to tap their knowledge of the field for a potentially more competitive quote.
Work With A Title Company With A Competitive Edge
Ensuring that the sale of a property goes smoothly and without issue is an important part of the home buying process. The experts at Mathis Title Company have the legal background required to thoroughly vet a property’s history and ensure that a buyer receives a home with a clean title and no strings attached. Reach out to the professionals for a title insurance quote so that you can protect your new investment and avoid unexpected pitfalls in the future.