Buying a house is a long process and involves many steps. For this question, the first home can quickly become overwhelmed by the entire process. Additional fees and costs can add up quickly. In addition, the pressure to obtain affordable housing in the real estate markets overestimated the stress levels of the students. Because home purchases are large investments for both the mortgage lender and the home, different types of insurance are needed to protect both parties. Typical insurances include mortgage insurance, PMI, hazard insurance, etc. Even if you’ve never financed a home, you’re probably familiar with this type of homeowners insurance. However, there is another type of insurance that is just as important: title insurance.

What is title insurance?

Typically, if a product is purchased and the buyer pays cash or obtains financing, the item becomes their possession. Home purchases are no different. On the other hand, if the headline is asking questions, customers may lose their homes. Newly built homes rarely have title issues, unless there are issues with land ownership. Because homes are constantly being bought and sold, property is constantly evolving. Before a home is sold and ownership is transferred to the buyer, the original owner must consent to the transaction.

Unfortunately, some houses are sold without the consent of the original owner. Situations such as divorce, condominiums, undisclosed heirs, etc. in May due to potential title issues.

For example, suppose a couple bought a house together and then separated or divorced. Even if a party separates and no longer contributes to the monthly mortgage payments, their name will remain on the title unless it is removed.

If the house is sold without the knowledge of the former, you have the right to contest the transaction at the expense of the new owner.

Title Insurance Benefits

Most mortgage lenders require the purchase of title insurance. There are two types of insurance. One is meant to protect the mortgage lender, while the other type protects the homebuyer. The homebuyer is responsible for paying for both policies. Simply put, title insurance protects both parties against legal claims against the property. Unlike other insurance that provides protection against possible future events, title insurance protects against past events. Therefore, any errors or defects related to the title will not result in the buyer losing their home.

Title insurance is inexpensive. In addition, the policy is paid only once, without renewals or expiration dates. Therefore, the policy will remain active as long as you own the property.