Though insurance isn’t likely one of your biggest concerns when it comes to purchasing a home, understanding why you need it and how it protects you is essential. You need various types of insurance to make a home purchase, and title insurance is one of those. See how it gives you peace of mind throughout the homebuying and homeownership process.
What is a title search?
When you hear the word “title”, it’s often referring to both a title search and title insurance. Insuring and searching a title is a two-part transaction. A title company searches a property’s title history to make sure it’s clear of any defects, such as other claims or property liens.
A couple examples include a seller who co-bought the property with a family member who hasn’t signed off on selling the property or a seller who has a lien on the property due to unpaid taxes, child support or contractor services.
A title company and search is essential to making sure that a home seller has the right to be selling the home and property and that the property is not collateral for an owed debt.
What is title insurance and why would I need it after a title search?
Another role of a title company is to issue insurance to a property buyer to guarantee against fraudulent ownership claims. Title problems can occur event after a title search, but title insurance is peace of mind that your title company will stand behind you, both monetarily and legally, if a covered title problem arises.
When do you pay for the title search and insurance?
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