Buying your new home is an exciting goal, and obtaining it requires a serious financial investment, so approach it cautiously—a title policy insurance protects your interests as a buyer. Here’s what it is and why you need the insurance below.

What Is a Title Policy?

A property title, also called a deed, is a legal document that specifies who owns a piece of property.

Before you close on a home, have a company conduct a property title search. This ensures that the property is clear of other ownership claims and that the person or company selling it is legally permitted to do so.

In some cases, a person may try to sell a house they don't own, like a renter posing as an owner. Misunderstandings are more common, however. If a married couple parted ways; the wife kept the home, but the title was never signed over to her. Since the husband's name is on the deed, his signature is also required to sell the home.

How Does Title Insurance Protect You?

If you take out a loan in the form of a mortgage to buy your home, you will need to take out a lender's or mortgagee’s title policy. This covers legal defense costs and reimburses mortgage payments you are unable to make if you lose the house because somebody else has staked a claim to it. Many lenders require this insurance.

For added protection, take out the owner's title insurance as well. This specifically covers your personal legal fees and losses in case of ownership disputes. While your lender may not require this additional title insurance, it’s an investment worth making. You only have to buy title insurance once, upon closing. The policy protects you for as long as you own the property. 

First Financial Title Agency of Minnesota Inc. has been helping home-buyers protect their investments since 1989. Located in Burnsville, they provide a comprehensive array of services needed to close real estate deals, including title policy searches and insurance management. Their team has more than 400 years of combined experience and an A+ rating from the Better Business Bureau®. Review their full offerings online. For an appointment, call (952) 831-5010.