WHY DO I NEED TITLE INSURANCE?
Problems can arise with the title of the property you are buying. You must be sure that the seller actually owns the property, for example. Although a professional will search the public records to look for liens and other problems, sometimes there are hidden title problems like forgery, mistakes in examining records, undisclosed heirs, etc. To avoid financial loss, you need an Owner’s Title Insurance Policy. This provides assurance that your title company will stand behind you– monetarily and with legal defense if needed- if a covered problem arises after you buy your property. The Owner’s Policy protects you for as long as you or your heirs have an interest in the property.
WHY DO I NEED TITLE INSURANCE WHEN I REFINANCE?
Your lender will require it. For example, you could have incurred a mechanic's lien from a contractor who claims he/she has not been paid. Or you could have had liens placed on your property for unpaid taxes, child support, or homeowner association fees. You do NOT need a new Owner’s Policy, however, if you already have one.
WHY DO I NEED TITLE INSURANCE WHEN I BUY A NEWLY BUILT HOME?
Since there probably were several previous owners of the unimproved lot, there could be liens on the land. Also, the builder might not have paid all his contractors, who could have placed liens on the property. You need both a Lender’s Policy and an Owner's Policy.
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