When purchasing a home many different factors are associated in bringing it all ogether, one of those being title insurance. However, not only is title insurance misunderstood but it is often not understood. The best way to think of title insurance is as protection for you! Just as you would need insurance on your car to protect you, other people, and the vehicle in the case of an accident, title insurance also provides needed protection.
Think of it this way – any lender that puts money on the line for you to buy a house is going to want some kind of reassurance that if something were to go wrong, they would be covered. The key of course is to work with a reputable title insurance company, one that has years of solid experience and expertise. Keep in mind that while nothing will probably happen, title insurance is still required.
As most people know, real estate can be very complicated. Life too is complicated, sometimes adding in things never expected such as layoff, bankruptcy, divorce, death, and so on. When these things change, they can have a monumental impact on real estate. For many people, the result means losing a beloved home. In addition to you going through this difficult time, the lending company also loses – money. In this type of situation, the title insurance would kick into gear for the lender. While it would not do anything for you, it does keep lending institutions alive so they can help other buyers.
Now, the other side of the protection is for you. In this case, as long as you own the property, if something were to happen to the lending institution, you would be protected. For instance, if there were a major dispute over who owned the lien on the house, the title insurance would be your best friend. You see, fraudulent situations happen often whereby someone might go on vacation for a few months and while gone, fake homeowners sell the house to an unsuspected buyer. When the real owners come back home and the new buyer is all settled in, a war erupts over who owns the house.
Sadly, these situations really happen, which results in huge lawyer bills and the loss of any money spent buying the bogus house. First, purchasing title insurance would mean a thorough search would be done so you would know the house was not even up for sell. However, if it were to slip through the cracks, the title insurance provides you with the protection of not losing all your money. Therefore, if you do nothing else while buying a home, always purchase good title insurance so you can enjoy a lifetime of peace of mind.