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What is Title Insurance?

Title Basics

When issues are encountered during the research of the deed and its property, the title company takes the initiative to clear the deed of any problems. After any issues are cleared, is is eligible for title insurance coverage. Title insurance is a form of protection for homeowners against financial loss due to defects or liens against the property. It is common for a real estate property that has changed ownership several times to have hidden issues with the deed that could negatively impact the current lender or homeowner. It is common practice for a lender to mandate the purchase of title insurance in order to protect the lender from an unexpected issue that could devalue the property.

Why You Need It

While purchasing title insurance is a required part of the mortgage process it is recommended that the homeowners purchase title insurance to protect themselves. An investment now could amount to big savings in the long run if a property is found to have issues.

Title Insurance Protects You From:

  • Ownership of the property by another party or entity.

  • Incorrect signatures on documents - including forgery or fraud of concerning title documents.

  • Flawed records or errors made in record-keeping.

  • Restrictive covenants (terms that reduce value or enjoyment), such as unrecorded easements.

  • Encumbrances or judgments against property, such as outstanding lawsuits or liens.