What is title insurance peace of mind when buying a home

Florida Title Insurance

What Is Title Insurance? Peace of Mind When Buying a Home

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You're forgiven for thinking that insurance is the least exciting topic related to buying a home.

However, title insurance is critical to establishing peace of mind as a homeowner. Confused about the difference between lender's title insurance and owner's title insurance and how to get one or the other? Read on for answers!When you buy a home, you “take title” to the property and establish legal ownership—confirmed by local public land records. As part of the closing process, your lender will require a title search, and you'll need to purchase title insurance that covers your property.

Potential title problemsPart of your settlement process will be to have a title search conducted by employees of your title or settlement company through local property records. Some of the issues they’re looking for include the following:

-Disputes between prior owners over wills: If your property was inherited and then sold by the heirs, there could be other heirs contesting the will and claiming ownership of your property.

-Liens for unpaid property taxes.

-Liens for contractors who worked on the home but were never paid.

-Clerical problems in courthouse documents: Believe it or not, a simple typo can lead to title claim problems.

-Fraudulent claims against the property or forged signatures: For example, if a group of heirs can't get a holdout to agree to sell the home, its possible that someone will forge a signature on a quit claim deed.

Lender’s title insurance and owner's title insurance Although as the buyer you pay for the lender’s title insurance premium, that policy only covers the lender in the case of a claim against the title. The lender's title insurance policy pays for the expense of researching a claim and any court costs incurred due to the dispute.Your title company will offer you owner's title insurance in addition to the lender’s policy. In many states, owner's insurance is optional. In most areas, it's common for buyers to purchase owner's title insurance, but in some areas it’s more common for the seller to buy the policy.

Owner’s title insurance is recommended, because lender’s insurance won’t protect you personally if the insurance company loses a battle over legal title.

You'd be required to pay for the continued fight over the title and could lose your investment in the property.

You can purchase basic or enhanced owner's title insurance, with the enhanced title insurance policy offering more coverage for things like mechanic’s liens or boundary disputes.While your title insurance covers you for things such as mistakes in the legal description of your property or human error, be aware that your title insurance will have some exclusions— particularly in cases where violations of building codes occur after you bought your home.