When buying a home, whether it is for use as a primary residence or a rental property, obtaining a Title Insurance Policy is extremely important. A title insurance policy is a one-time payment at the time of closing and the policy coverage stays in place as long as the owner owns the property.
While the cost of title insurance can vary slightly, the cost for a policy for a single-family home with a price between $200,000 and $500,000 is only $282.00. Although the policy is optional, in many cases, it actually saves the purchaser money at the time of closing. The reason for the savings, is due to the fact that the purchaser’s mortgage company will require either an up to date survey or a title insurance policy. Paying $282 for title insurance is generally much less expensive than purchasing a new survey.
Where title insurance is purchased, the policy will cover the Purchaser in 3 main areas. Firstly the policy provides coverage in the event the purchaser discovers a major boundary encroachment from the Purchasers property onto a neighbouring property. Examples would include a deck that was built over the property boundary that needs to be torn down and rebuilt. Title Insurance would generally cover the cost to remedy such an encroachment. Secondly, title insurance covers some Permit related issues. As an example, if the Purchaser discovers after closing that a previous owner of the home did electrical work that required a permit, and the proper permit was not obtained or completed the title insurance company may cover the costs of remedial work required to bring the work up to code. Finally, and most importantly, title insurance covers the purchaser for mortgage fraud. Mortgage fraud is identity theft where the fraudster impersonates the home owner, registers a new mortgage or line of credit on title to the unsuspecting home owners home and disappears with the money. Title Insurance will cover the home owners during their entire period of ownership for mortgage fraud.
In short, title insurance is a very important component of purchasing a home. Feel free to call me to discuss title insurance in more detail and specifically how it can assist you in your closing.
Mike Miller
Matlow, Miller, Cummiins, Thrasher
519-621-2430