Who doesn't dream of owning property? In fact, look at most people's bucket lists, and you will realize that owning great homes and property falls among the top ten items.

Unfortunately, the process of acquiring the property is easier said than done. In addition to saving for the money and the right property, you incur other closing costs.

Title insurance is one of these closing costs that you incur when in the process of making your dream come true.

Similar to other insurances, it is normal to ask: is title insurance required? Given the far you have come and the effort you put in to get the title, it is risky not to insure it.

Still not convinced that you need to invest in title insurance? Read on to learn what title insurance is and why you should have one.

WHAT IS TITLE INSURANCE?

While other types of insurance protect against an unknown future, title insurance protects against an unknown past. It is a policy that pays the insured in case there is a problem with the title during or after closing costs.

A standard title insurance perfects title rights and protects possible damage based on the insurance policy. This insurance protects against back taxes, conflicting wills, or outstanding liens, among others.

Additionally, somebody with an older document may press charges against the property you acquired through the title, making you lose your investment.

Though most of these issues will occur shortly after you have achieved the title, the insurance will protect you even if they emerge years later.

TYPES OF TITLE INSURANCE

There are two main types of title insurance; the lender's title insurance and the owner's title insurance. As the name suggests, the lender's title insurance protects the mortgage lender as long as the mortgage is active.

It protects them from any title defects since they have the highest financial risk when buying property.

If you are buying the property using a mortgage, this title insurance is a must-have. The mortgage lender will need you to pay for this title insurance.

The owner's title insurance protects you after you become the title owner.

You can possess this insurance for as long as you own the property for security purposes.

Although this insurance is optional, it protects you from issues such as title forgery that could lead to the loss of your property even after you have cleared your mortgage payment.

For this reason, it is safe to have owner's title insurance so that you can have peace of mind. You can also get an extended or enhanced title insurance for maximum protection of your property.

IS TITLE INSURANCE REQUIRED?

It is normal to ask whether you must invest in title insurance, especially if you feel that insurance companies are a rip-off since you may end up never using their services.

However, doing away with the title insurance claiming that you may never have to use it is too much of a risk on your hard-earned property.

Sure, you will conduct a title search, and rarely do they miss a thing. Nevertheless, they are not always 100% accurate, and the burden may fall on you.

For instance, what happens if you find out that there are unpaid taxes on the property you own? Without insurance, the burden falls on your shoulders, and you risk losing the property.

Other cases that make it necessary to have the title insurance cover are such as:

• Boundary disputes
• Errors on the title
• Incorrectly recorded documents
• Forged power of attorney claims
• Claims of un-authorized sale from an ex-spouse or somebody else with rights over the property
• Conflicting wills
• Unpaid child support of former owner

If you expose yourself to this many issues if you lack title insurance, then the price you pay for the insurance is worth it. However, remember paying for the lender's title insurance is mandatory.

HOW MUCH DOES TITLE INSURANCE COST?

Generally, the amount you pay for either the lender's or owner's title insurance is based on your location, loan amount, and home price. However, the approximate price of title insurance is about 0.5% to 1.0% of the home price.

Additionally, you might find a fixed price for the lender's title insurance and owner's title insurance in some states. Nevertheless, more often than not, the owner's title insurance costs more. Luckily, this is not an ongoing expense but a one-time fee.

You have a choice to select the title insurance company that you feel fits you best. You can also request your agent for recommendations on the best insurance companies.

The mortgage lender may also have a choice of the insurance company they want you to purchase from.

Moreover, you can use different title companies for the lender's and owner's insurance. However, it could cost you less if you use the same company for both insurances.

If you feel that the financial burden of the insurances is too much for you, you can negotiate with the seller or lender to share the cost. In fact, in some states, the seller is responsible for paying for the owner's title insurance.

Additionally, it is possible to get a discount for the owner's insurance if the seller is already has less than ten years old.

HOW DO YOU CHOOSE A TITLE INSURANCE COMPANY?

If it is your responsibility to select a title insurance company, watch out not to settle for a company that causes more harm than good. Some of the details to look for to confirm that you have the right company are:

• Professional experience
• Fees charged
• Reputation
• Customer services offered

As you seek recommendations from your real estate agent, don't rely 100% on them since but shop around. This way, you are most likely to come across a genuine insurance company within your budget.

GET YOUR TITLE PROTECTED WITH QUALITY TITLE INSURANCE

It is not unusual to ask is title insurance required, especially if you are buying property for the first time.

However, considering how much stress and money you endure getting the property of your dreams, it makes sense to invest a little bit more and have it protected from any possible misfortunes.

Get in touch with us today to choose your insurance policy and relax knowing your property is safe.