What is a Title Insurance

Title insurance is a type of insurance that is also called indemnity insurance. The main purpose of title insurance is to protect the homebuyer and the lender from any problems in the title deed of the property that may occur in the future. The lender’s property insurance is purchased by the homebuyer to protect the lender and is the most common type of property insurance. Another common type of title insurance is the owner’s title insurance bought by the seller to protect the buyer’s investment. Buy plot on installment in Islamabad.

Details of a title insurance

There needs to be a clear title for a property to be bought or sold. Companies providing the title insurance are responsible for researching the title and making sure that it has no liens or claims against it. This is a necessary step to be carried out before title insurance is issued. The term title research is used to describe the process where all public records relating to the property are studied to ensure no problems with the legal ownership of the house. It will also discover any claims made against the property, such as unresolved building violations.

The most common claims against the title are the non-payment of taxes, liens from mortgage loans or home credits, and inheritance problems due to conflicting wills. Title insurance protects both the buyers and lenders from losing their investments due to these claims. The main difference between normal and title insurance is that normal insurance protects the client from future problems. In contrast, title insurance protects the client from actions taken in the past. Title insurance usually covers the illegal ownership of the property, incorrect signatures or names on official documents, unrecorded easements, or any outstanding lawsuits against the property.

Different types of title insurance

There are mainly two types of title insurance mentioned above, the lender’s title insurance and the owner’s title insurance. In most mortgage cases, the lender requires the homebuyer to purchase a lender’s title insurance for them. The lender’s title insurance protects the lender in the case when the seller of the property fails to transfer the property to the buyer due to certain problems. If the home buyer goes for a lender’s policy, title insurance will only protect the lender from losses. In contrast, an issued policy provides some assistance to the home buyer. Another type of title insurance is the owner’s title insurance, which the seller of the house buys to protect the buyer. Since the default of homeownership is from the seller’s side, the buyer can demand the seller purchase an owner’s title insurance. You should also read about Faisal Hills payment plan.

How to purchase a title insurance

The closing agent or an escrow starts purchasing title insurance once the closing has taken place and the purchase agreement has been signed. Most countries and states have their title insurance writers that you can buy title insurance, regardless of what type. The cost of basic title insurance is around $300 to $3500 and depends on the company and the services you avail. In many cases, it is required to buy a lender’s policy and the owner’s policy must be purchased together. The title insurance is usually purchased at the closing of a property, and it has a one time fee. Invest in Silver City

Conclusion

Not purchasing title insurance makes lenders and the buyers vulnerable to several claims. If the title has problems, the buyers will lose all the money they have invested. A title insurance increases the confidence in the property of the buyer. To find out more information about the title insurance, it is advised that you consult your real estate agent.

Author Bio  

Ramza Zahra is a Karachi-based freelance content writer who uses her life experiences and curious nature to research and pen it down and make a living. Currently, she is working with Sigma Properties as an Snr. Content Writer.

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