Title Insurance
Title insurance is often required to protect the lender against loss if a flaw in title is not found by the title search made when the house is purchased. You may also get an owner’s policy to protect yourself. Title insurance is an insurance policy that protects your legal rights to own, possess, use, control and dispose of real estate. It is issued only after a complete and thorough title search is performed.
Title insurance is not unlike other parts of the real estate industry that are affected by the ups and downs of the market. When volume is high title insurance companies make large amounts of money which they can use to build reserves for the not so great times or invest in technology as the industry is ever changing and tough to keep up with. Title insurance is not as well understood as other types of home insurance, but it is just as important.
When you purchase a home, instead of purchasing the actual building or land, you are really purchasing the title to the property. Title insurance is ordinarily taken out by a purchaser of the property, or by individual lending money on the mortgage, in an amount equivalent to the purchase price of the property. To be entitled to coverage, the purchaser typically pays one lump sum premium, usually at the day of the closing.
Title insurance is a unique form of insurance. It provides coverage for future claims or future losses due to title defects which are created by some past event (i.e., event prior to the acquisition of the property.) These risks are far less obvious than those protected against by automobile insurance, but can be just as devastating. Title insurance is the way of making certain. Without a current title policy, the loan is essentially unmarketable.
Gurmit is a licensed Insurance and mortgage expert. To get in touch with Gurmit, please visit his website www.gurmitsingh.ca