Essential Details Regarding Your Purchase of an Owner’s Title Insurance Policy
Are you thinking of purchasing owner’s title insurance? Unlike lender’s insurance, this type of offer targets solely the buyer of a property, who would soon become the owner. As you receive the deed for your new home, you have to consider the possibility that not all the paperwork from the past 50-80 years is fully in order, and that past owners or their descendants could arrive to try to profit from that fact. An owner’s title insurance policy will ensure this doesn’t happen.
Where Does Owner’s Title Insurance Come in?
Owner’s title insurance is required if you want to make sure that there are no title defects or problems left over from past owners that could still affect you today. In the event that someone sues you, claiming that they are the rightful title owner, or that they have some kind of right over your home, regular lender’s insurance will not help you. Instead, this is where owner’s insurance comes in, providing you with the financial and legal support needed to settle the matter.
Owner’s vs Lender’s Policy
While lenders may force you to accept a lender’s title insurance, owner’s title insurance is optional. You can discuss it with the seller and agree to a certain company and coverage level. In some cases, the seller will pay for it without needing you to cover any of the costs. In fact, in some areas, sellers are even required to cover the expenses of title insurance. Unlike lender’s policies, owner’s insurance is also useful for providing a variety of benefits when you want to sell your home, the title company usually paying for any work needed to correct title defects. Ultimately, owner’s policies can save you thousands of dollars in the long run, while providing you with the peace of mind that you are regarded as the legal title owner of your residential property.
Examples When Owner’s Insurance May Be of Help
When you find out that the property was conveyed to a third party by a person who faces bankruptcy and had no authority to sign the deed, owner’s insurance will offer you complete protection against any claim made on their behalf. Also, instances when past mortgages seem to be connected to the property in an unclear way, or when deeds are recorded without a proper legal description may cause a lot of problems if you don’t have owner’s title insurance.
A Few Additional Advantages of an Owner’s Policy
As a new property owner, you’ll find there are many advantages to buying a competitive owner’s policy premium that most banks and experts won’t even tell you about:
An owner’s policy will provide you with coverage for legal costs and owner protection regardless of whether the claim made against you is valid or not.
You also get full protection from surveying errors and additional errors in recording past deeds.
When a lender’s insurance policy has already covered the cost of a title search, the additional owner’s policy will usually come at a significant discount.
Unlike the lender’s policy, your owner’s policy will stay in effect even as your mortgage is paid off and your equity increases.
As a result of these facts, it becomes clear that the few hundred dollars paid for owner’s insurance are not only worth it, but they may not even matter in the long run, since you will definitely come out on top.