Title Insurance Explained: The Dirty Truth

In this video, you will learn about title insurance. Here is what we will cover:

- What Is Title Insurnace?
- How Does Title Insurance Work?
- Is Title Insurance Necessary?
- How Much Does Title Insurance Cost?

Title insurance is a fee you’ll come across on your closing documents for a new home. You may wonder what the heck it is and why you're paying for it.

While it sounds like another unnecessary insurance policy, title insurance is very valuable when it’s needed.

You can consider yourself lucky if you never need it, but if you do, you’ll be glad you have it.

There are two types of title insurance – owner’s and lenders. Only lender’s title insurance is required when you take out a mortgage, but most buyers purchase an owner’s policy too. Title insurance protects either you or the lender from title defects.

Title defects are issues either the title searcher missed or wasn’t apparent when they examined the title. Common defects include liens, back taxes, or ownership contention due to past ownership or inheritance.

If you don’t have title insurance, you would be on the hook for the thousands of dollars in legal fees or expenses that come about because of the defects.

Title insurance protects you or the lender from the financial cost incurred from any defect in the title.

For example, if an unpaid lien from years ago pops up when you own the property, your title insurance would cover the cost rather than you paying it out of pocket even though it had nothing to do with you.

Title insurance works differently than any other type of insurance. For example, car insurance protects you from future accidents or incidents, but title insurance protects you from past incidents.

Since liens, encumbrances, and ownership claims attach to the property, not the owner, you would be liable for things you had nothing to do with but are now your problem because you own the property.

Title insurance covers the costs to settle the issue and any legal battles that occur because of it.

Timestamps:
0:00 Title Insurance Intro
0:13 What Is Title Insurance?
1:39 What Are the Types of Title Insurance?
1:41 Owner's Title Insurance
2:11 Lender's Title Insurance
2:41 How Much Does Title Insurance Cost?
3:22 What Does Title Insurance Protect Against?
3:55 Is Title Insurance Required?
4:20 What Are the Risks of NOT Having Title Insurance?
5:04 Quick Recap

Don't forget to follow us on Instagram - @SimpleMoneyLyfe
  / simplemoneylyfe  

#money #mortgages #insurance #titleinsurance #house #home #homebuyers #homebuying #homeloans #homeloan