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New Home Buyer? How The Types Of Title Insurance Differ

If you are a new home buyer, it may have just dawned on you how big of an investment buying a home can be. For most people, buying a home is the largest investment of our lives. Now imagine what it would be like to purchase a home only to find out later on that there were problems with the title. Of course, the title search that is done before you purchase a property should bring up any liens or claims on that property, but it might not find forgeries, undisclosed heirs or filing problems that occurred in the past and may now jeopardize your investment. The best way to protect the investment that you are making in your new home is to purchase title insurance.

What is Title Insurance?

Title insurance is basically a type of indemnity insurance designed to protect the insured party against financial losses associated with defective titles. There are several circumstances where a need for indemnity insurance may become vitally important:

Types of Title Insurance

Title insurance breaks down into three general types of title indemnity policies. These are:

When you buy a home, it is important to discuss the differences between various types of title insurance before closing to ensure that you are insured adequately.

Why New Home Buyers Need Title Insurance

As the secondary mortgage market continues to grow, it is important to note that the majority of residential real estate transactions that involve a mortgage should also involve title insurance. If you are a new home owner, you should work with professionals like those at TitleSmart, while the transaction is still in escrow to help avoid potential problems and monetary losses. Owner’s policies can be purchased for a one-time fee that is generally 1% of the purchase price of the property. This will cover your title for the entire duration of the mortgage. Title insurance offers new home owners financial security and real peace of mind.