Even after the title is examined, you will need protection against all the other problems and defects in the title which are not revealed by the public land records. The protection you need is called Title Insurance.
There are two types of Title Insurance Policies; one policy is required by your lender and is called a Lenders or Mortgagee policy. This policy protects the lender in the case of a title problem. The second type of title insurance is called an Owners policy. This policy protects the owner's interest in the real estate and improvements thereon. If you order an owners policy at the same time as the required lenders policy, you will get a substantial savings.
Do I need title insurance?
An Owners policy protects against many things which cannot be found in the title search, such as defects caused by fraud. Fraud can be perpetrated in many ways; undisclosed heirs, false affidavits, invalid divorces, and/or forged documents. Losses caused by these matters are only some of the major reasons you should purchase an Owners title insurance policy.
What does Title Insurance cost?
The cost of title insurance on most properties is based on the purchase price of the property, or the amount of your loan. This cost is very small compared to the security your policy provides. The initial premium is the only payment you make as long as you or your heirs own the property.
