Benefits of Title Insurance
Posted by Hena Bhakta // July 13, 2016 // Blog / Featured / Real Estate Minneapolis // Title Insurance / Title Insurance Benefits
Not everyone has title insurance. So what is title insurance, why is it needed in the first place, and how does it benefit the insurance holder? To start with, you’ll be surprised to know that it’s actually a type of insurance that’s considered essential when you’re buying a house. Here’s a more in depth look at title insurance:
What is title insurance?
Think of when you’re buying a home that’s already been previously occupied. Naturally, to protect yourself and your investment, you’re going to want to get some insurance. You have insurance for the physical structure of your house as well as its contents. These types of insurance usually take care of the damages outside and inside your house. Title insurance, on the other hand, is a type of insurance that protects your ownership.
Why do I need it?
When you purchase a property, you want to make sure that it is indeed yours and that you’re free to sell it. In the event of finding out that errors or omissions have been made in examining the records, unknown liens have surfaced, and undisclosed heirs have been discovered, you’ll be protected and have peace of mind. It is surprising situations like this that can impact your right of ownership of the property you are buying. You’d want to be prepared if such events do occur.
Benefits of Having Title Insurance
Now, let’s move on to the benefits of having title insurance. The most obvious benefit is, of course, your protection from contingencies like fraud, undisclosed heirs or spousal claims. Here are a few more that you might be interested to know:
- Protecting your and the lender’s investment. If your house is mortgaged, it’s not just you who has money in it. Your lender will consider your house as an investment too. Let’s say you’ve already made a down payment on the house and your mortgage has already come through. All of a sudden, a claim to the property appears out of the nowhere. If you have title insurance, it will, most likely, cover the amounts needed as well as the legal fees related to taking legal action.
- You’ll get long-term protection. Title insurance only requires you to make a one-time payment. What’s great about this is when you renovate your home or when you pass it down to your children, the policy will still stand.
- Your interests are protected. Homebuyers can never really know if a property is involved with some sort of financial issue until the issue actually pops up. Discovering that the property you’ve already made a down payment on has tax liens, construction fees or outstanding mortgage payments from the previous owner that needs to be settled is heart breaking. This will prolong finalizing the sale! This can easily be avoided with title insurance.
- You won’t need to worry about legalities in the will. Because a house is a big investment, it’s unavoidable for you to worry about situations where your ownership is compromised. You’ll be less worried when you have title insurance. It’ll give you the peace of mind you need.
- Extended coverage offers extra protection. There are title insurance policies that also offer the owner protection against losses incurred. These policies are usually included with an extended coverage and may cover:
- Zoning violations
- Subdivision law violations
- Improvements that involve an easement
- Building permit violations and/or restrictions
Don’t hesitate to share this information with friends and family who might need to know about it. For more helpful real estate tips, check out our blog here.