Is Home Title Insurance Required?
We hear the question all the time: is home title insurance necessary? After all, your mortgage lender has a policy. The quick answer to this question starts with three letters: y-e-s.
Buying a home doesn’t always ensure that you won’t have to go up to bat for ownership later on down the road. Title insurance helps protect you from the unexpected scenarios that can threaten your claim on a property, including:
- Outstanding Liens Prior to Purchase
- Undisclosed Heirs
- Conflicting Wills
But why should you when your mortgage lender already has title insurance? While the policy they include is great for them, it doesn’t protect your investment the way you may think.
Buyer Title Insurance vs. Lender Title Insurance
Lenders purchase title insurance called a Loan Policy to protect their own investment. However, just because the amount of money they lent to you is protected under their insurance policy doesn’t mean that you’re included in that safeguard. A Loan Policy only covers the lender and his or her interests, not the title owner.
Home buyers need to purchase an Owner’s Policy in order to protect their real estate investment for the amount in which they purchased it. The great thing about title insurance is that it is only a one-time fee.
Home buyers purchase title insurance upon closing on their real estate property or home, and that policy covers them for the duration of their ownership. That means as long as you own the property, you’re covered!
An Owner’s Policy includes an initial examination of a title prior to purchase as well as protection afterward. The reason for this is because of the initial examination—although thorough—doesn’t always catch discrepancies or conflicts that may exist.
Sometimes details can be elusive or intentionally omitted by previous owners in order to avoid impeding on a sale. While this can be disconcerting to home buyers, your Owner’s Policy is what gives you peace of mind.
Many mortgage lenders require title insurance to be purchased in order to receive a mortgage loan. However, depending upon how one negotiates the sale, the purchasing of this policy can fall on either the real estate buyer or the owner who is selling it.
Talk to Action Title Services about Protecting Your Home Title
Located in Naples, Florida, Action Title Services has 30 years of experience in title insurance policies. We make it easy to protect your investment by walking you through the process while handling the legwork so you don’t have to worry.
Whether you’re here in Naples or looking to buy property here from afar, Action Title Services can lend a helping hand. With an A+ rating from the Better Business Bureau, we have built a reputation for exceptional service.
Hablas español? Nosotros también! We have a team of bilingual professionals on staff to help clients whose primary language is Spanish.
If you’re in the midst of buying or selling real estate, gives us a call at 239-262-2200 or fill out our contact form to learn more about our policies.