Buying a home is an enormous financial commitment, so buyers often try to cut as many expenses as possible. One item that may seem expendable is title insurance, especially if the property has been owned by the same family for several years. However, skipping title coverage can have serious consequences, potentially costing you thousands of dollars and affecting your ability to sell your home later. Here are a few important reasons to invest in the coverage. 

Why Do You Need Title Insurance? 

1. Your Lender Requires Coverage

Most lenders make title insurance a condition of issuing a mortgage since the loan is secured by the title to the property. In these instances, you’ll have to buy coverage, but take a careful look at the policy before you sign. The title insurance policy chosen by your lender is designed to protect their interests, so it will likely only cover the value of the loan. As you pay down the debt, the value of the policy decreases with your balance, leaving any equity you’ve built up completely unprotected. To shield yourself from potential title defects, choose a policy designed to protect owners, not lenders.

2. A Variety of Title Defects Can Affect Your Property

The seller of the property might believe they have a clear title, but problems can arise from almost any direction. An inheritance mistake from 50 years ago, a previous owner’s tax lien, or fraud can give someone else a legal claim on the house. Other common title problems can be caused by simple mistakes, like unsigned documents from previous sales or incorrect legal descriptions of the land.

3. Insurance Includes a Title Search

Before insuring your title, the company will perform a thorough search for any problems that might arise before you close on the property. Knowing whether there are any liens or claims beforehand can help you decide whether you still want the house, or give you a chance to renegotiate the sale.

For more than 30 years, Chattanooga Title has provided Tennessee home buyers with peace of mind and valuable protection against unexpected title defects. Using the latest investigative techniques and drawing on decades of experience, their team will conduct a thorough search and issue title insurance policies tailored to your specific needs. To schedule an appointment, call their office today at (423) 756-3057.