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9 Important Things Covered by Buyers' Title Insurance

Monday, September 28, 2020

The demand for homes is falling, but pricing remains steady. Many homeowners are delaying listing their homes, but there were still 3.9 million homes for sale in May 2020.

The interest rate for a 30-year fixed-rate mortgage was only 3.31% including points in mid-July 2020. This makes it a prime market for both buyers and sellers.

When purchasing a home obtaining title insurance is an important step. Read on for more information on this important option.

Getting Ready to Buy

One of the largest purchases you will ever make is your home, and you want to make sure your investment is properly protected. Professionals you may need include:

Lender’s Title Insurance

If purchasing with a mortgage, this policy you are obligated to buy for the protection of the lender. The bank or mortgage company is the only beneficiary of this policy.

If you have equity accumulated in the home and a discrepancy arises, this policy does not provide you with coverage. That is why it is important to understand the difference between this policy and an owner’s policy.

Owner’s Title Insurance

This optional policy provides protection for problems not found during the title search if anyone challenges your legal ownership of the property.

If someone claims they have rights to the property you own, the title insurance company will handle the defense on your behalf.

Here are nine items title insurance policy will cover

  1. Disputes over the location of property lines
  2. Disputes that the seller did not have a right to sell the property,
  3. Unknown heirs claiming ownership
  4. Undisclosed lawsuits or financial liens against the property
  5. Fraud or forgeries in the chain of title
  6. Wills that are inconsistent or conflicting
  7. Property taxes or assessments that are not paid
  8. Easements or other right-of-way claims that are undocumented
  9. Filing errors

Title Insurance Cost

Title insurance is bought with a one-time charge for the policy. The Lender’s policy lasts up until the time the sale is complete.

The owner’s policy lasts for the duration of time the buyer owns the home.

Do I Need Title Insurance? The Legal Perspective

While in many cases you can purchase a home without further issues arising, from a legal perspective the need for an owner’s title insurance policy is real.

The potential problems listed above are the tip of an iceberg on the number of issues that can arise. There is no time frame on when problems may surface.

You may make payments on your mortgage, build equity in your home and suddenly a problem arises. Your equity has protection if you have an owner’s title insurance policy.  

Where to Shop for Title Insurance

Your real estate agent may have a company they use on a regular basis. We recommend you select a separate company to obtain a quote before making your decision.

At Heartland Abstract we offer policies for any property sold in Pennsylvania. If you have questions on title insurance, please contact us online or at (610) 326-6300. We look forward to answering your questions and providing you with a quote.

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