Title insurance is a critical part of the home buying process, because it protects you from any problems with the property title that might have occurred before you bought the house. Title insurance is purchased from an abstracting company like MacGregor Abstract.
When people talk about title insurance, they are usually talking about two separate types of coverage:
Lender’s title insurance insures that your lender is protected if there is a problem with the property’s title, such as an ownership dispute or unpaid taxes. This is required by all lenders.
Owner’s title insurance (or owner’s policy) insures that you are protected if there is a problem with the property’s title — even after you buy the house.
How does owner’s title insurance protect me?
A big advantage of owner’s title insurance is that it provides coverage for all past owners of the property. That way, even if there was a problem with the property in the past, and no one has discovered it yet, you will be covered. A title insurance policy protects you financially in the event that a title search does not uncover a title defect. A title defect is an issue with the title that makes it invalid.
Title defects can be many different things, but are most commonly past liens against the property, deeds from previous owners that were never properly recorded, or ownership disputes between parties.
A title insurance policy will help protect your financial interests in property by allowing you to be reimbursed for any issues that arise as a result of a defective title.
When you buy a house in New York, you’re going to have to pay for several different kinds of insurance including homeowners insurance, fire insurance and flood insurance. However, one type of insurance you may not think about is title insurance and this is one type of coverage that could end up saving you thousands of dollars in the long run if you ever need it.
There are two different types of policies – owner’s and lender’s – and each covers the policyholder in a slightly different way. Generally speaking, however, a policy covers the owner for legal expenses associated with defending their ownership in court as well as damages resulting from any judgments made against them due to lawsuits over ownership rights.
What is title insurance?
Title insurance protects an owner’s or lender’s financial interest in real property against loss due to legal defects in the title. It is a one-time premium that depends on the sales price of your home. You need it to buy a house with a mortgage.
What are some examples of title issues that could result in the loss of your home?
If there was a mistake in recording the previous deed, or if the person who sold you the home wasn’t the rightful owner, you could lose your home. Someone could come along and claim ownership. There may be hidden liens against your property, for instance, for unpaid taxes or work done on your home. A lien is a legal claim against property to secure payment of a debt or obligation. Title insurance covers you from these risks.
How does title insurance work?
New York State law requires all real estate transactions involving a mortgage to have title insurance issued by either an attorney or an authorized title agent. The seller’s attorney or title agent must issue a Commitment for Title Insurance to you, which shows what the title company will insure if you decide to buy the property and get an owner’s policy. The commitment also lists any exceptions to coverage, such as restrictions on how you.