Having own house is a biggest dream of many people. The dream is very expensive for many people. Risk is a common factor in all purchases as well in the home property buying too. Once if there is any title fraud or incident is occurred while buying, it is very difficult to regain the financial position. To cover such risk, some companies are offering title insurance policies.
- Title: Before we know about the title insurance, let us see what title is. The word ‘title’ is a legal term. This means having legal ownership of the property. At the time, you are purchasing property, the owner of that property signs on the deed or transfer document over to you. Then the title is registered in the registration system of the government.
- Title insurance: We found title insurance predominantly in the United States. An alleged comparative deficiency of United States land records laws resulted to develop the title insurance policy. The title insurance is a kind of indemnity insurance policy. It protects commercial or residential property lenders and owners against ownership or property’s title losses. If a title is insured, it will support against a lawsuit as it is insured, or reimburse up to actual loss incurred. The real property interests insured are typically a mortgage or fee simple. Even though it can purchase to insure any interest in real property, including life estate, or lease or easement. There are two types of title insurance policies. Those are owner’s title insurance and lender’s title insurance.
- Why need it: If you are doing first time real estate transactions, you will hit with a lot of strange terms, processes and people. While you are buying, you make sure that the seller is actually having legal title. Normally, to research the history of ownership, closing party will go to local property records office. These are may be official but there is a possibility of wrong. Sometimes the person who does the title search by mistake may not record the important information or wrongly recorded. For example, by mistake, he did not record a bill against the property, which is drawn for unpaid taxes, or there are any family issues and claims against that property etc. will cause a lot of legal wrangling. There is a risk that you may lose the property when you lose legally. The issues like alcoholic, insane, drug user, etc. will become big headaches.
- Fraud: The title fraud or the real estate title fraud is a kind of real estate fraud. It harms the individual house owners and their lenders. Without your knowledge a fraudster, transfer your home’s title to himself or herself or an accomplice using forged documents or stolen personal information. Then the fraudster get mortgage on your home and will disappear with money.
Title insurance will help you not to disturb your financial stability even there is any contingent incident occurred.