When you buy a home, you hire a title company to research your home to make sure there are no problems with the title. This confirms that the seller really owns the home and is free to sell it.
No matter how carefully your title company does its research, there’s always the chance that something will not come up in the search. Most often this is because of errors or omissions, undisclosed information, or forgery.
If someone disputes your ownership of the home based on an error or problem with the title, you could spend money in legal fees or lose your home altogether.
Title insurance protects you should someone challenge your ownership of the house. It ensures that your title company will stand with you and give you the necessary monetary and legal backing to fight the challenge.
Title insurance is a one-time purchase that you make at closing. You buy a policy for yourself and a policy for the lender. Your policy is usually for the selling price of the home; the lender’s policy covers the amount of the mortgage. Title insurance is not required by law, but many lenders will not give you a loan without a lenders title insurance policy.
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