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Reasons to Love Title Insurance

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Title Insurance

The Top 4 Reasons to Love Title Insurance -  If you plan on using a mortgage to purchase a new home, be prepared to buy title insurance. Your lender will make you buy it because it covers any issues regarding the title of your house for the life of your mortgage. After all, there are many issues that could arise from the title of your home because titles are passed from one person to the next – so you never know if there may have been a forgery along the way or if there are property or estate taxes that are still owed on the home. OK, so you have to buy it, but why should you LOVE it?

1.  Title insurance covers up to the cost of your mortgage
It’s relatively inexpensive to purchase, and if something does go wrong, you’ll be totally protected for as much as your mortgage is worth.

2.  It pre-dates your home purchase
Title insurance is different than other types of insurance, because it protects the lender against anything that occurred before the loan was issued. In the case of health insurance, for example, you are protected against any illness that arises after the policy was issued. But for title insurance, you are only protected against things that happened before the policy was issued.  Should there be any liens placed on your home, for example, you will be responsible for having them removed before selling your home.

3.  You get all kinds of research with it
In exchange for your money, title companies spend a lot of time thoroughly researching your home and any issues that may be associated with it. You can’t even imagine some of the issues that might get turn up due to the length of your title! As a result, title insurance can save you thousands of dollars in potential losses. That peace of mind alone may be well worth the cost!

4.  You don’t have to shop around for it
When you buy “normal” insurance – like health insurance or car insurance – you have to search for a reputable company before you can even get the policy. That’s not the case here. While you have every right to search for a company on your own, most title insurance companies direct their marketing efforts toward the lenders themselves, so you can simply go with your lender’s recommendations when making this purchase. (Your realtor can tell you if you’re better off going through your lender or if you should seek out a company on your own.)

As an added benefit, some states have set pricing limits, so if you do decide to go it alone, you may not even have to compare rates!

Bottom line – some people fall so in love with the security of title insurance that they choose to continue their coverage long past the end of their mortgage payments. Some people choose to keep it for generations! Just remember – you will need to purchase new title insurance if you ever refinance your home, even if you are refinancing with the same lender. Although this may seem unnecessary to you, lenders need to make sure that there haven’t been any changes to your home, such as a lien that has been placed on your home after you purchased your original title insurance. You may feel as though title insurance is an unnecessary or an annoying expense right now, but it can be well worth it. Eventually, you might even fall in love with the purchase!
 


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