Owner’s Title Insurance – It’s a No-Brainer

When purchasing a home, most homebuyers are accustomed to paying standard fees like inspections, appraisals, and mortgage fees. However, one crucial type of protection that escapes many is the owner’s title insurance policy—a one-time cost at closing that can cover your biggest investment for as long as you own the property.

So, what is title insurance?

There are two types of title insurance, lender’s title insurance and owner’s title insurance.  The first is the lender’s policy.  All mortgage lenders will require this to be purchased at closing.  Most of the time, this is a buyer cost; though, depending on the state you’re in, it could be paid by the seller. This protects the lender by insuring them that all liens and ownership claims have been settled before the title transfers to the new owner at closing. If the lender needs to foreclose, they have first lien position, which means they are paid first.

The second is the owner’s policy, which is what protects YOU!

Title insurance safeguards against problems that could occur with the history of ownership of the property. These can be:

• Hidden liens or outstanding taxes
• Typographical errors in public records
• Unknown heirs with claims to the property
• Fraud or forgery in previous ownership documents

Again, while a lender’s title insurance policy is meant to protect the mortgage lender, only an owner’s policy insures you, the buyer.

Why it matters

Imagine purchasing your dream home, only to discover years later that someone else claims part of your home—or that there is a prior undiscovered debt on the home by someone else. Without title insurance, you'd be paying to resolve such issues. With it, you're covered.

One-time cost, long-term peace of mind

Unlike most insurance policies, an owner's title insurance policy is a one-time premium paid at closing. It's a small fee for a lifetime of protection from possible catastrophic legal and financial headaches.

Final thoughts

In the excitement of home buying, it's easy to go an extra step or two to save a couple hundred dollars; but an owner’s title insurance policy is the one fee you don't want to skip. Remember, it’s an insurance blanket for one of life's biggest investments.

For more information on owner’s title insurance policies, reach out to your title or escrow company for more information.  They are always happy to help and explain the benefits of this crucial policy.Protect your home and protect your future by obtaining an owner’s title insurance policy. 

Article by:
Aaron Severson
Community Mortgage Loan Consultant
Wings Mortgage, NMLS #400908
Phone: (952) 997-8393
Apply with Aaron
 

Insured by NCUA. NMLS #403259. Equal Housing Opportunity. Membership with a $5.00 Share Savings account required to close on a mortgage loan.