With so many details to consider when buying a home, many people may wonder whether title insurance is actually necessary during the home buying process. What is title insurance and how does it protect your investment in your new home?
What is title insurance?
Title insurance protects you from issues with the property that you were unaware of when purchasing real estate. For as long as you own the property, this policy will protect you from issues related to past owners that can impact your use, enjoyment or ownership of the property in the future.
Some of these title issues may include:
- Forged documents, including forged mortgages
- Sales executed under a power of attorney that had expired
- Fraudulent sales
- Mistakes in public records or legal documents relating to the property
- Liens for unpaid taxes
- Issues with inheritance, such as an heir with a claim to the property or incorrect interpretation of a will
- Inaccurate descriptions of the property
- Foreclosure based on a mortgage from before your purchase
As Forbes notes, title insurance can be especially important as new technology—from remote notary services to digital closings for real estate—changes the real estate market. Without oversight, these automated and digital processes may lead to errors, but title insurance offers protection from the concerns that may arise.
When purchasing a home, title insurance is an important precaution that will protect your investment and offer peace of mind for as long as you own the house.