If you are taking out a mortgage to buy a house, then the lender will probably ask you to get title insurance for the new property. Title insurance will protect both the mortgage lender and buyer from financial losses, which may occur due to legal expenses if there is an issue with the title of the property or home you are purchasing.
Having title insurance protects you from all kinds of issues, which occurred before becoming the owner. This means that you don’t have to worry about forged title documents, ownership issues, or unpaid debts from previous owners.
Types Of Title Insurance
There are two different types of title insurance available out there, lender’s title policy and owner’s title policy. The former type of title insurance policy protects the lender while the latter offers protection to the home buyer.
The mortgage lender will ask you to get an insurance policy on their behalf. However, it is best to get the owner’s title policy too, it will help you safeguard your investment against unforeseen title issues.
Individuals who are new to the world of title insurance might have a few doubts and questions. For starters, they would want to know what title insurance covers. Title insurance usually covers the following.
- Fraud or Forgery
- Unknown heirs to the home or property
- Liens, which precede the new owner
- Missing information
- Inconsistent wills
- Defective paperwork such as improper recording from closing and escrow
- illegitimate selling or transferring of the deed
Just like all other types of insurance, you will be able to expand your existing insurance coverage for a smaller price through policy endorsements. Endorsements usually include zoning violations, border disputes, building ordinance violations, and more.