The real estate business has a lot of loopholes that can lead to the loss of your home in the future. Luckily, the loopholes can also be dealt with in advance to prevent any drama in the future. One of these precautions is the title insurance that insures any problems that may come with the processing of the title.
Getting title insurance is one of the standard steps home buyers take before closing on a home purchase. Title insurance is crucial for a homebuyer because it protects you and the lender from the possibility that your seller does not — or previous sellers did not — have free and clear ownership of the house and property and, therefore, cannot rightfully transfer full ownership to you.
The chances of calling on the title insurance are slim, but, it comes as a great help in cases where the title transfer is not smooth. Some of the benefits of the insurance are as follows;
More often referred to as Real Estate Title Insurance, Real Estate Insurance is meant to protect customers in the case of financial loss due to any defects associated with purchasing a title. This type of policy is intended to protect a new owner from any hidden or unknown defects on a title they are purchasing. For example, in the case of liens, back rent, judgments, or similar title issues.
Real estate title insurance even protects against lawsuits targeting the title. If, after a title is purchased, an issue is discovered there can be an important financial loss to the owner, including the potential loss of the property completely. However, real estate insurance protects against this possibility.
Unlike other insurance types, real estate insurance is a single time purchase that does not have monthly premium or charges. The initial cost of the insurance is based on the value of the title.
Sourced from: http://myinsurance.co.ke/real-estate-insurance/
The title insurance is a one-time purchase unlike other forms of insurance. The best way to get the insurance involves allowing the closer to choosing the insurer.
Your escrow or closing agent will launch the process of getting you title insurance soon after your purchase agreement is signed. Usually, your closing agent or attorney will choose your title insurer for you, from one of the five major U.S. title insurance underwriters.
You will probably need to shell out a one-time fee of around $1,000 for title insurance. (In some states or locales, however, the seller traditionally foots the bill.) The process is all very standard and likely to go through without a hitch.
The title insurance will require you to spend about $1,000 as a one- time fee. The specific risks that are covered by the insurance are as follows;
1.Standard coverage handles such risks as:
- Forgery and impersonation
- Lack of competency, capacity or legal authority of a party
- Deed not joined in by a necessary party (co-owner, heir, spouse, corporate officer, or business partner)
- Undisclosed (but recorded) prior mortgage or lien
- Undisclosed (but recorded) easement or use restriction
- Erroneous or inadequate legal descriptions
- Lack of a right of access and
- Deed not properly recorded
2.An extended coverage policy may be requested to protect against such additional defects as:
- Off-record matters, such as claims for adverse possession or prescriptive easement
- Deed to land with buildings encroaching on land of another
- Incorrect survey
- Silent (off-record) liens (such as mechanics’ or estate tax liens)and
- Pre-existing violations of subdivision laws, zoning ordinances or CC&R’s.
- Post-policy forgery
- Forced removal of improvements due to lack of building permit (subject to deductible)
- Post-policy construction of improvements by a neighbor onto insured land and
- Location and dimensions of insured land (survey not required).