5 FAQs About Title InsuranceDecember, 19 2017
Title insurance is something all homeowners with a mortgage have, but many don’t know exactly what it is, what it covers, and what its purpose is. Let’s look at some of the most commonly asked questions in relation to title insurance to gain a better understanding.
What is Title Insurance?
Title insurance is an insurance policy that protects both homeowners and lenders from any defects in the property title. What does that mean? If another person claims ownership of a property the property owner and lender are protected financially against those claims because of title insurance. Likewise when title insurance is purchased any claims against the property such as liens or levies are discovered so they can be dealt with.
Is Title Insurance Required?
Title insurance isn’t required by law, however if you are taking out a loan on the property your lender will require you to take out insurance on both the loan and the property. While not required, title insurance for both the lender and the purchaser is a wise decision as it ensures there are no claims against the property.
What Does Title Insurance Do for Me?
Title insurance protects you, the buyer, from any defects in the property’s title. For example, if a previous owner makes a claim that the property is still rightfully theirs, the title insurance protects you from the financial costs associated with that claim. Another example would be if the property taxes had not been paid under the previous owner. In this case the title insurance would find this information out ahead of time and protect you from making a potentially unwise investment.
Where Does the Protection Begin and End?
The protection associated with title insurance depends largely on the policy you purchase. If you purchase only lenders insurance to appease your lender, your coverage is more limited than if you purchase both lenders and buyers insurance. Purchasing both homeowners and lenders insurance can protect you should a defect in the property title be found at a later date, once you’ve already invested money into your home.
Does Title Insurance Change if my Property Value Changes?
Title insurance is purchased once and is good for the entire duration of you owning the property. However, the policy is only good for the value of the house when you purchase it. If you make improvements to your home, or the value goes up significantly, you’ll need to purchase additional title protection.
Maryland title insurance can seem confusing and complicated, but it doesn’t have to be. Fortunately, when you buy a home, you are able to shop around to find the best title insurance policy for you. If you are in the market for a title insurance policy, or you just have questions, give Armour Title Services a call today (1-877-TITLE-30) to discuss our policy options. We are an experienced title insurance company and will gladly answer any questions you may have.
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