Title insurance is an important part of the mortgage process, yet many people are still unsure of its purpose. If you’re in the market for a home, it’s important to be familiar with title policies and how they can affect the home-buying process. The title and escrow services professionals at First Financial Title Agency of Minnesota, Inc. have a proven reputation for delivering exceptional closing and title services. Their professionals, located in Burnsville, MN, offer a guide to title insurance below.

What You Should Know About Title Policies

What Is Title Insurance?

Title policies protect anyone buying a home from any loss resulting from errors in the ownership records of the purchased property. This type of insurance compensates the new homeowners for legal costs or damages in a variety of situations, including unintentional errors in document filing or previously unreported liens on the property. 

There are two types of title insurance policies available: lenders’ policies and owners’ policies.  A mortgage lender will most likely require that you obtain a lender policy, which protects the amount of money they lend you. Owner's policies are typically optional.

Why Is Title Insurance Necessary?

During the mortgage process, the insurance company conducts a property title search to make sure all past liens and mortgages on the property have been paid, and to check if any easements or legal actions are still active. The company also verifies that the title is legitimate, so you can rest easy knowing you are the rightful owner of the property.

If any issues arise, you could potentially save thousands of dollars in legal costs that could result from a defective title. While you could save money by not purchasing title insurance, the policy never expires and it could protect you from future issues as well.

The team at First Financial Title Agency of Minnesota, Inc. helps their clients understand what they should know about title insurance products, and they take pride in making the closing transaction as easy as possible. Give them a call at (952) 831-5010 to speak to an agent about title policies. You can also visit them online to learn more about their escrow services.