For those who have had the opportunity to acquire real property, you probably have noticed that in your closing costs must have reflected one that says: “Title Insurance Policy" or “Title Insurance Premium."
What a surprise, perhaps unaware that ownership or property rights to real estate may be subject to insurance to cover and compensate the owner against any risks that may arise on the title. Let"s explain a little more:
Title insurance is NOT insurance covering risks relating to the structure of the property. No cover walls, ceilings, fire damage, hurricanes or anything that has to do with the physical body of the property. Nor it has to do with liability insurance.
This unique coverage is about property rights and recognizes the title. This insurance policy guarantees the buyer that the title or evidence of property rights to the real estate free from defects, liens, restrictions, preventive or protective measures, except those be the buyer accepts as exceptions to its policy. A title company protects not only the owner but also their heirs, and in most cases, this protection extends even to having sold the property.
You imagine that after acquiring property, a person claims to have a better right to it. For example, there"s unknown debt appears with the condo, or that it possesses a preventive measure for some debt tax nature or injunction for nonpayment of a contractor, among other problems that may arise. That would be very painful and yet occurs with some frequency. Do not worry; these are the situations covered by this type of policy.
Lender"s title insurance policy
To obtain a mortgage loan, you usually need to obtain title services for the lender. The title insurance of the lender protects said lender against problems with the title of his property. For example, if someone files a claim against the owner of the home. The lender"s title insurance does not protect your investment in the home (your capital). If someone sued with a claim against your home, you are the first responsible person. The lender"s title insurance only covers the claims that affect the lender about the loan.
Buyer"s title insurance policy
Purchase title insurance is not mandatory for the buyer when business is cash, but we strongly recommend that when making a real estate transaction, the make with your trusted attorney or certified Securities Company. It is your right to demand the purchase of title services, which would respond to the full amount of the investment in case the ownership of the property seeth affected or violated, including court costs and attorney. It is paid only once, and its price is determined by a gradual and progressive scale not exceeding 1% of the amount of the transaction. In short, this unique insurance offers buyers protection, security and above all peace of mind to invest in a country with clear rules.
The title insurance of the owner protects the owner if someone claims and says they have a claim against the home before the owner bought it.
When you buy a home, you receive a document that is usually called a deed, which indicates that the seller transferred the property, or the “title" of that home, legally. A title company can protect you if someone files a lawsuit later and says you have a claim against the home before you bought it. The most common claims are usually filed because the previous owner did not pay the taxes or because certain contractors did not charge for work done on the home before you bought it.
You can compare prices of title company separately from your mortgage. If you compare the prices of title insurance, you can save money. If you decide to buy title insurance for homeowners, the total cost may be less if you use the same title company for both the lender"s and the owner"s policies, compared to buying them from different providers.
Depending on your state, the title company can give you a detailed list of charges at the time of closing, which may be different from what appears in your Loan Calculation or Closing Disclosure.