Insuring Your Ownership of Real Estate

Insuring Your Ownership of Real Estate

by Aazdak Alisimo

When you buy property, what you see is not always what you are getting. To combat this problem, every person purchasing any real property should get title insurance.

Essentially, title insurance is a type of policy that homeowners can buy in order to protect their purchase. What is it used for? Well, sometimes a home can change hand many time throughout its existence, and sometimes people are less than honest when they sell a home. In short, title policies exist for the sake of a homeowner that has been caught in a bad situation.

Sometimes, homes can come with a slew of issues and situations that have not yet been discovered by unsuspecting homeowners. If there is a problem with unpaid taxes or other forms of liens, a homeowner may be responsible for any leftover. Title insurance not only covers anything that a homeowner may not be expecting, it also covers any sort of legal fees associated with the problem at hand.

Title insurance is mandatory if you will be requesting a mortgage. All mortgage lenders insist that homeowners are covered by a policy so that the lender doesnjt get stuck holding a loan that is secured by nothing whatsoever. Although it will certainly protect your lender, the policy will not cover any sort of equity that you put into the property.

Ultimately, title insurance is vital because it acts as a protection against problems from the past. Let's say that a person dies and leaves the property to one of their heirs. The heir decides to sell it and you buy it. The title company issues insurance on the property. Another heir comes out of nowhere and sues on the basis that he or she really owes the property. While this is going to be bad news, your insurance policy will kick in and protect you should the heir win. It will also pay for your attorney in most cases.

Given this example, you can probably see pretty quickly how important title can be. Buying property is almost always a big money event. If you are committing to big dollars, you need some protection. This type of insurance is the way to do just that.