What is Title Insurance?

First, let’s talk about the meaning of “Title” as a Real Estate term. When you hear someone mention your “Title” they are referring to who legally owns the rights to a piece of property or land. This term is often confused with the term “deed.” Your “deed” are the legal documents that transfer “title” to you. More and more homeowners are choosing to purchase title insurance than ever before. It is vital that you understand the importance of title insurance when you are buying a home.

During a real estate transaction, the Escrow Officer will work closely with the Title Officer to make sure that the Title on a home is free and clear of prior encumbrances before the property records are transferred to the new owner. The Title Officer will run a title search on the property and provide you with a copy of the Preliminary Title Report that will show the properties legal description, how Title is currently held, deeds on the property, if there are any leans or judgments on the property, and much more.

Who Benefits From Title Insurance?

Title Insurance protects buyers and lenders against any issues or problems that may arise regarding the legal ownership of the property. Title Insurance is there to protect you if there is a problem with the Title of your home after the property has been transferred over to you. Title Insurance covers you in case there is a filing error, forgeries, and undisclosed heirs claiming property ownership from a past owner, just to name a few. The title insurance that lenders require, which protects only the lender’s interests in your property, is separate from the title insurance you will be offered by the Title Officer.

Title Insurance for the Lender

If you purchase a property using a lender, typically your lender will require a loan policy of title insurance. They set this policy in place to protect their interest in your property until your loan is paid in full or until you refinance.

Title Insurance for the Property Buyer

Typically, your Title Officer will offer the buyer a chance to purchase Title Insurance at the time the buyer receives the Preliminary Title Report.

Now, you will want to purchase an Owner’s Policy of title insurance to ensure your rights as the owner of the property and protect your investment. Your Owner’s Policy will be in place as long as you have an interest in the property. Be sure not to get these confused. You will want to make sure your interest is covered, so don’t forget about your Owner’s Policy.

Conclusion

If you have questions about your Preliminary Title Report or Owner’s Policy, you can reach out to your Escrow Officer or Title Officer. They will be able to answer all your questions.