When purchasing a home, buyers typically think about inspections, mortgages, homeowners insurance, and moving expenses. Title insurance may receive less attention, but it plays an important role in protecting property ownership.
Why Is Title Insurance Needed?
Even when a property appears to have a clear ownership history, problems from the past can sometimes emerge.
Public records are carefully researched before closing, but records may contain errors or certain issues may not be immediately discoverable. Title insurance is intended to provide protection against specific covered title defects that existed before the policy was issued.
Examples of Potential Title Concerns
A title issue can take many forms. There may be an undisclosed lien, an error in a recorded document, a question involving a previous owner, or another claim affecting the property.
The title search is designed to identify these concerns before closing whenever possible. Title insurance adds protection for certain covered problems that may be discovered afterward.
Two Policies With Different Purposes
Buyers may hear both “lender’s title insurance” and “owner’s title insurance” during the closing process.
The lender’s policy protects the mortgage lender’s interest in the property. An owner’s policy, on the other hand, is designed to protect the homeowner’s interest according to the policy’s coverage.
Understanding the distinction can help buyers make informed decisions during closing.
Confidence Beyond Closing Day
Closing may mark the end of the transaction, but your ownership continues for years afterward. Having the appropriate title protection in place can help provide greater confidence as you move into your new home.
If you are buying a home and want to better understand title insurance, contact Clarion Title Company. Our team can answer your questions and help guide you through the title and closing process.