Section Subtopics Title Title Search Title Insurance

Title Insurance

  There are two types of title insurance: the lender's policy and

  the homeowner's policy.  Homeowner's title insurance policies

  insure homeowners against specific title-search errors or

  mistakes, and against loss of the home or a portion of it due to

  disputes over the ownership of the property. 

  Lender's title insurance insures the lender interest in the same

  situation of title errors or disputes.  The cost of title insurance

  is usually a set value per thousand of dollars of the total loan

  amount.  Lenders require lender coverage to protect their

  investment.  Owner's coverage is optional for the borrower.

  In cases where property has changed hands over time, there is

  the possibility that an error in the title has occurred. Examples

  of title issues include: a forged signature on the deed, which

  would mean no transfer of ownership to you; an unknown heir

  of a previous owner who is claiming ownership of the

  property; instruments executed under an expired or a

  fabricated power of attorney; mistakes in the public records;

  deeds by persons of unsound mind; deeds by minors; deeds by

  persons supposedly single, but in fact married; or liens for

  unpaid estate, inheritance, income or gift taxes

  In such situations, if you do not have title insurance

  you could lose your investment in your home.

  Title insurance will pay for defense against any lawsuit

  attacking the title as insured, and will either clear up title

  problems or pay the insured's losses.

  For a one-time premium, an owner's real estate title insurance

  policy remains in effect as long as the insured, or the insured's

  heirs, retain an interest in the property.