Why You Need Home Title Insurance

Have you ever looked through the list of fees when closing on a home mortgage and wondered why you had to pay for title insurance? The paperwork from any lender can be overwhelming and, while some fees are negotiable, the one fee you can’t avoid is the line item for title insurance. What is it?

Dan Rafter over at WiseBread.com explains the importance of title insurance:

To sum up, title insurance protects you from clerical errors, mistakes in property records, or unpaid taxes involving the home you are purchasing. Maybe the past owner of the home hasn’t paid property taxes in years. If you buy the home, the government agencies levying those taxes will come after you to pay them — unless you have title insurance. Or, maybe a past seller bought the home with a sister. Maybe these two siblings had a falling out, and the brother sold the home without telling his sister. That spurned relative could come after you for the profits she says she is owed from the sale — again, unless you have title insurance protecting you. Title insurance is like most other forms of insurance: You pay for it in the hopes that you’ll never need to use it. Title insurance covers the window of time before your ownership of the home, protecting you from certain claims and legal fees that were beyond your control. Even though it extends backward through time indefinitely, coverage ceases on the date you take ownership. If you decide not to pay property taxes once you’re the official homeowner? That’s on you.

In short, title insurance is important and can prevent serious financial headaches when it comes to real estate transactions. For additional nuances about the importance of title insurance, you can read more at wisebread.com.

 

First Posted here: Why You Need Home Title Insurance

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