What is Title Insurance and Why Do You Need It?

Title insurance protects against title search errors, undiscovered title defects, and losses that arise from disputes over property ownership once the property has been purchased.

• What is a title search? A title search is intended to provide a buyer with basic information about the real estate he or she wants to purchase. Among other things, the title search will ensure that no one other than the seller has any ownership interest in the property.

• What is a title defect? A title defect is any legal right to property that is claimed by a person other than the owner.

• Why is title insurance needed? If a mortgage loan is used to finance the purchase of a home or any other piece of propert, the mortgage lender will most likely require to purchase a title insurance policy that insures them against title defects. This policy, called a lender's policy or a loan policy, protects only the mortgage lender's interest in the property. To protect your own interests in the property against loss due to unknown title defects, you will need to purchase an owner's policy.

• How necessary is an owner's title insurance policy? You are not legally required to purchase both a lender's policy and an owner's policy. However, there are several reasons why purchasing an owner's policy may make good sense.
  
  (1) First of all, compared to the protection it offers, the cost of an owner's policy is minimal. For only a few hundred dollars, an owner's policy can spare you the time and expense of defending your property rights against claims brought by others and will reimburse you for losses caused by title defects up to the face amount of the policy.
  
  (2) Secondly, even the most thorough title search cannot absolutely assure that no title defects are present. An owner's policy will protect and defend you against undiscovered title defects caused by, among other things: 
       - Forged documents 
       - Liens on the property for unpaid taxes 
       - Negligence on the part of the original title examiner 
       - Undisclosed or missing heirs who come forward to claim part of all of the property 
       - Other unknown claims to the property that are not contained in any public record

To learn more about an Owner's Policy and Lender's Policy, and their associated benefits including costs, contact Only Closings today at 203-581-1712.

The weekly Tip-of-the-Week* is supplied by Only Closings --

a law firm devoted to real estate closings.

    - Our closing staff is made up of seasoned, experienced real estate attorneys.
      - Close where it is most convenient for the client (home, office, job or bank)
      - Very competitive closing fee and no hidden fees!
      - No fee consultations.
      - Personalized, responsive service from all of our attorneys and paralegals

  To learn more about Only Closings and how they can help you quickly close a property transaction, call them at 203-563-9677 or visit them online at www.OnlyClosings.com

*The content within the "Tip-of-the-Week" is strictly for informational purposes and not intended to be interpreted and/or used as legal advice. Only Closings and OnlyClosings.com is a service provided by Tamara L. Peterson Attorney at Law LLC.

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