When you’re buying a house or other property, both a property title search and title insurance are usually required before closing the deal. While this may seem like just another expense in your list of closing costs, both can save you from headaches and expenses in the future if anyone disputes your property boundaries or right to ownership. First Financial Title Agency of Minnesota in Burnsville, MN, is your local expert for handling all of your title search and title policy needs, and they’re here to make sure you understand what each one is.

What Is a Property Title Search?

A property title search determines ownership history of a property. It takes some detective work to go through records to follow the chain of ownership, including any buying or selling of adjacent parcels. If there’s any reason to suspect that the current owner doesn’t have the right to sell or if there’s evidence of a boundary dispute, you will be notified and have a chance to work out the issues with the seller before closing. If the issue is serious, you may also decline to buy the property.

What Is a Title Policy?

Title insurance provides an added safeguard against any future problems with the deed to your new property. It protects you and your mortgage lender financially in the event a lawsuit is ever filed against the title. There are two major types of policies.

Lender's Policy

This policy is typically required to close on a mortgage. However, this policy only provides protection to the lender and does not protect you personally. Coverage is typically provided for defects, access rights, unrecorded easements, and liens that can affect the property value.

Owner's Policy

This policy provides you full protection in case issues relating to the title come up after the title search. Legal fees relating to defending any claims against the title will be paid. A title insurance agent will sell you an owner's policy for a one-time fee. 

To find out more about how a property title search and insurance policy will protect your interests in your real estate transaction, call First Financial Title Agency of Minnesota in Burnsville at (952) 831-5010. You can also visit their website to take advantage of their online tools and resources.