Purchasing title insurance is one of the last steps homebuyers take before closing on a home. Title insurance is important for a homebuyer because it protects them and the lender from the possibility that the seller doesn’t (or even previous sellers didn’t) have free and clear ownership of the house and property, and therefore can’t transfer full ownership to the buyer. Although the chance of filing a claim is low, the loss if there is no title insurance is high. In fact, if homebuyers’ do not have title insurance, they could ultimately lose the home. The Platinum Group is here to help future homebuyers understand the importance of title insurance and why they need to have it.
Importance of Title Insurance
There are many different situations in which your title insurance could protect you. Worst case scenario is that the seller knowingly sells you a home they don’t own – for example, renters posing as sellers. More likely though, the seller originally co-purchased the house and is unaware that the other purchaser’s signature is needed to sell the home. The seller could also have bought the house from someone who didn’t have the right to sell or purchased the house under the terms of a will that was out of date, and the updated will left it to someone else. In any of these situations, title insurance will step in to help.
Lender’s Policies and Buyer’s Policies
Title insurance is purchased in two different forms: lender’s policies and owner’s policies. When taking out a mortgage loan, the lender will require you buy a lender’s policy to pay for legal defense costs and reimbursement on any mortgage payments that you can’t make because you’ve defaulted on the mortgage. While it is typically not required, most lenders will encourage you to purchase an owner’s title policy as well, which covers your own legal fees and other losses. Even the most in-depth preliminary title searches can miss things, like an heir to the house turning up or paperwork with misspelled names reveal a claim concerning the property. In these circumstances, title insurance will defend such claims and might even resolve the issues brought up. If the court decides against your favor, then the lender’s policy will reimburse the lender for what you owe on the mortgage. The owner’s policy will cover your financial losses.
Preliminary Title Report
Title insurance companies will perform a title search before issuing a policy. The search involves combing through public records concerning the house including past deeds, wills, trusts, divorce decrees, bankruptcy filings, court judgments and tax records. The preliminary title report gives everyone a chance to eliminate trouble spots before proceeding with the sale, or to call off the sale if there is anything too serious.
Buying a Home with The Platinum Group
Title insurance is just one of the many different details that must be attended to when buying a home in Colorado Springs. The Platinum Group is here to help with all your buying and selling needs. We bring together the top real estate agents in the Colorado Springs area to provide you with Platinum Service and Platinum Results.
The Platinum Group, Realtors The First Choice in Real Estate
The Platinum Group, Realtors The First Choice in Real Estate
Visit our website: www.PlatinumHomeSales.com
6760 Corporate Drive, Ste 300
Colorado Springs, CO 80906
(719) 536-4444
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