Did you recently purchase a new home? Or are you planning to acquire one soon? Buying a new house comes with a ton of paperwork.
There are bank statements, tax documents, and a loan statement, if you’re applying for a mortgage. However, there is one item that prospective buyers tend to get confused about: the title insurance.
Do you really need to buy one for your new Colts Neck home? Let us set one thing clear: a title insurance is optional on the part of the homebuyer or homeowner. However, there are many benefits you can enjoy if you invest in one.
Title Insurance: What Is It and How Does It Work?
What is title insurance? It is a type of insurance that protects the policyholder from financial losses due to problems concerning the home title. Compared to other types of insurance products, title insurance is a one-time purchase thing.
Moreover, it only protects the homeowner from liabilities that may arise from undiscovered problems from the past. These problems range from unresolved disputes to errors and undiscovered liens.
Sometimes, the title of the property you bought may not be a clean one. Some of the signatures may be forged. In some cases, the title comes with deeds that were not recorded properly.
More importantly, title insurance protects you in case there is damage to the property that you and your lender didn’t know beforehand.
Other possible problems with the title include inaccurate legal descriptions and building permit violations. Thankfully, title insurance protects you from expenses that may stem from these issues.
In the case of a newly built home, buying a title insurance will still do wonders for the homeowner. Even if your home doesn’t have any title history, the same thing cannot be said on the property where the house stands. In this case, there may be undiscovered issues within the chain of title.
Furthermore, your home contractors may have unfinished dealings. In turn, these can affect the title transfer process negatively.
How Much Will It Cost You?
When it comes to the cost of title insurance, the prices vary, depending on certain factors. These include the state you live in, your down payment for the home, the loan amount, and the sale price.
As to who pays the insurance, it also differs depending on the state. In Colts Neck, it is the buyer’s responsibility to shoulder the title insurance expenses.
As for the insurance provider, you have the freedom to choose which company you like. Also, it is important to note that there is another type of title insurance that protects the lender. If you applied for a mortgage, you will also have to shoulder the expenses for the lender’s insurance.
Thankfully, some of the leading insurance providers offer discounts if you get the two types of insurances from them.
Cover Other Bases
With a lot of things to cover in securing your home, investing in title insurance can help reduce your worries. As for the other areas of concern, a trusted local expert like Colleen Meyler is someone you would want on your side.
With over three decades of industry experience, she can help guide you in all your real estate transactions. Call her today at 732.995.5102 or email her at ColleenMeyler(at)gmail(dotted)com for any questions.