- Mortgage Insurance

Title Insurance

If you are a buying a home in the US you will need title insurance. Title insurance is insurance to protect owners and lenders financial interests in property against liens, leases, life estates and title defects. The insurance guarantees that you are receiving full legal ownership of the property.

Title insurance provides you with coverage in the event that you need to defend the title to your real estate. For example if there is a lien that was not found in the original public records search, a forgery, interest of missing heirs, etc. you will be able recover any losses.

Almost all lenders require an owner’s policy title insurance for loans secured by real estate. As a homeowner you have the right to choose what title insurance company to use. Your real estate lawyer, real estate agent or lender can suggest a company. The American Land Title Association (ALTA) is the United States national association of title insurers, you can find the standard forms on their website.

You will want to the company to provide you with a public records search report that states any liens, defects, etc. that may be attached to the title. The title insurance company will charge you a fee for this service in addition to your insurance premium. The one-time premium can be paid by the seller or the buyer, find out who will be paying and what the costs before you sign any real estate contracts. The owner’s policy lasts as long as the insured party retains an interest in the real estate that is insured.

Lenders policies are sometimes called loan policies and are issued to the mortgage lender. The policy stays with the loan so it still protects the buyer if the loan is sold to another lender like Fannie Mae or the Federal Home Loan Mortgage Company.