Purchasing a home is both exciting and terrifying – most of the terms you come across are alien to you, which might make you hesitate before signing on the deal.
Most first-time homebuyers believe that title insurance is “just another fee” they have to pay to buy a home. It may surprise some, but title insurance is far more than just a little fee – it protects both lender and buyer from many types of claims made against the title to a property, such as encumbrances and liens. Another surprising factor – one out of every four residential real estate transactions have an issue with the title.
Title insurance is based on loss prevention – which means a much larger percentage of the premium dollar is spent up front to prevent any title problems from occurring.
These costs cover: searching, identifying, and resolving title issues before closing to eliminate risks that could result in a future claim. The due diligence performed before the policy is issued aids in resolving any potential roadblocks.
It’s important to know the various terms in the real estate world so you feel confident and secure throughout your transaction!