A home is a significant investment, so it’s not only important to protect the property you buy, but also the legal rights you acquire upon transfer of ownership. This is the purpose behind title insurance. Here is what you need to know about this type of policy and why it’s an essential component of the home-buying process. 

What Is Title Insurance?

For a one-time fee, title insurance protects against claims challenging the ownership of your property. Before you can close on a home, a title search will confirm whether or not the property has a clean title. This should uncover any problems with the home’s ownership history and verify the current seller’s legal right to transfer the deed into your name. Unfortunately, title searches don’t uncover 100% of land disputes, which could end up causing you serious legal and financial trouble in the future. Title insurance mitigates the monetary burden caused by loss of ownership rights from an illegal transfer of property.

How Does It Work? 

Title insurance covers any defect found in a property’s title. This may include unsettled lawsuits, claims of unknown heirs, liens, unpaid taxes, forgery, and deed errors or omissions. Many situations could lead to a faulty title. As such, mortgage lenders require homebuyers to purchase title insurance to safeguard their own interests in the investment. If you lose your home due to an issue with the title, a lender’s policy will pay off the loan balance, releasing you from future obligation. However, it won’t cover the down payment or mortgage payments you’ve already made. Therefore, it’s wise to also secure an owner’s policy, which covers all the legal costs and losses you incur from any complications that arise. 

If you’re buying a home, title insurance will prevent you from getting stuck with existing debts or legal problems after closing. The real estate attorneys at Pill & Pill PLLC can further protect your homeowner’s rights. They have assisted numerous homeowners in Martinsburg, WV, with the real estate closing process, providing valuable guidance to ensure a sound investment. Call (304) 263-4971 to discuss your title insurance needs, or visit their website to learn more about its benefits.