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Six Ways To Protect Your Homeowner’s Title

A homeowner's Title is a legal document that protects the owner from any liability of the property. It also prevents anyone from claiming ownership or taking possession of the property.

When you buy a house, you typically obtain a deed that proves the seller legally transferred ownership, or "title," to their home to you. If someone later sues you and asserts that they have a claim against the house dating back to before you bought it, title insurance may be able to defend you.

The six ways to protect your homeowner's title are: Protect your homeowner's title by knowing what you can do to avoid common pitfalls.

What is Title Insurance?

What is Title Insurance

Title insurance is an agreement between a property owner and an insurance company that protects against financial loss stemming from legal claims involving the ownership of the property. 

This agreement is often required by lenders and is based on the property's estimated value.

The coverage will typically include improvements made to the property and other specific items, such as furnishings or cars, with a limit amount set by the insurance company. If you are building a new home, it is very likely that you will need to purchase land and construction insurance.

How to Determine How Much Title Insurance You Need

Title insurance is a type of insurance that protects the lender against loss caused by the borrower's inability to repay. It is typically used when a loan is taken out on the property.

Title insurance

The title company will pay out the money in case the property goes into foreclosure or if it becomes impossible to sell because of title issues.

The amount of title insurance you need depends on how much risk you want to take and what your budget allows for. Generally, lenders require $100,000 worth of coverage per loan in order to protect themselves against potential losses. but, this varies depending on the value of the property and the amount of coverage that you can afford.

The cost to buy title insurance will also vary depending on what state you're in, so it's best to work with a local real estate agent or lender for more information about your specific situation. The cost of title insurance is typically lower than mortgage interest rates,

First, make sure you have a clear title search.

Next, get a title insurance policy. Next, keeping up with all the taxes - property tax and real estate transfer tax will help prevent future issues.

Finally, have your home inspected to see if it needs any repairs or renovations before selling it on the market.

  1. Make sure you have an up-to-date title insurance policy.
  2. Obtain a copy of your property deed and make sure it is properly dated, recorded, and signed by all parties involved.
  3. Maintain good records of who owns what and where it is located on your lot, as well as in your home.
  4. If you are renting out part or all of your property, make sure that there is a contract in place that clearly states who has what rights to the rented space and how long they have them for.
  5. Have your home inspected for structural and aesthetic issues before putting it up for sale.
  6. Pay your property taxes in full on time, every year to ensure that you retain the right to possess and sell the property without any complications.
Real Estate Financing

Make sure you are able to provide proof of ownership, which can be done by holding onto a copy of the original receipts.

  1. How long is title insurance good for?

    Until the mortgage is fully repaid, the lender's title insurance coverage is in effect. As long as you or your heirs continue to have a stake in the property, an owner's policy of title insurance remains in effect.

  2. How do I get my title after paying off my mortgage?

    Your home's title has to be cleared. The mortgage should be deleted from the title of your home once you have paid it off. You will be charged by the mortgage company to create this "Release" paperwork.

  3. How long does a title search take?

    Even though the title search can be completed in a matter of hours, it usually takes between 10 and 14 days. In general, the older the home, the longer the title search.

  4. Signs of Home Title Theft

    Here are some signs that your home title may have been stolen:

    1. Unexpected mail: Receiving mail related to a mortgage or property transfer that you did not initiate.

    2. Unusual activity on your credit report: Seeing inquiries or accounts on your credit report that you did not initiate.

    3. Notification of a foreclosure: Receiving notice of a foreclosure on a property that you own.

    4. Notification of a tax sale: Receiving notice of a tax sale on a property that you own.

    5. Inability to sell or refinance: Being unable to sell or refinance your property because the title has been transferred to another person.

    6. Unauthorized changes to your property title: Discovering that the ownership of your property has been transferred to someone else without your consent.

    If you suspect that your home title has been stolen, it is important to take immediate action. Contact your local law enforcement and consult a real estate attorney as soon as possible to help protect your rights and interests.

How to Choose the Best Title Insurance

Title insurance is an insurance policy that protects the lender and the borrower in a real estate transaction. There are two types of title insurance policies:

  1. The owner's policy protects the lender from a loss if there is a defect in the title.
  2. The mortgagee's policy protects the borrower from loss if there is a defect in the title.

In this article, we will discuss how to choose the best title insurance for your situation and who should be considered as your agent when you buy it.

Homeowner's Title

The process of purchasing title insurance depends on a number of factors. The agent you work with is going to have to analyze the area's market prices and make recommendations for you.

They will also decide which insurance company will offer the best coverage for your needs. These agents typically charge fees that range from $1,000 - $3,000+ for this service.

Title Insurance Cost
Title insurance

According to Jeremy Yohe, vice president of communications for the American Land Title Association (ALTA), a national trade association for U.S. title insurance agents, the total cost of a title insurance policy is roughly 0.5% to 1% of the purchase price when you buy a lender's policy and a homeowner's policy together.

According to data from the National Association of Realtors from December 2019, the fee range corresponds to a premium of $1,372.50 to $2,745 for a home with a median price of $274,500. Although title insurance prices vary by state, you may expect to spend more for title insurance if your purchase price is higher.

According to Yohe, the cost of a new lender's title policy for a refinance loan is closer to 0.5% of the loan amount. A homeowner's title policy you acquired when you bought your house will cover you for as long as you own it, so you won't need to buy another one if you refinance.


What Are the Possible Consequences of a Lost Title?

A lost title can be a costly problem for homeowners. They are not able to sell their home after they move and they have to pay the closing costs on top of the mortgage payments.

It is best to avoid these consequences by keeping your title in good order at all times. If you do lose your title, contact your lender for a new one as soon as possible.

This is why it's important for homeowners to protect themselves by obtaining a title insurance policy. This will protect your home against losses due to a lawsuit and also give you an incentive if you sell your home before the lender forecloses on it for non-payment of the mortgage loan.

How to Prevent Home Title Theft?

Home title theft, also known as property title fraud, is a growing problem where criminals use fake or stolen documents to transfer ownership of a property to themselves. Here are six ways to help prevent home title theft:

  1. Regularly check your property title: Regularly check your property title to ensure that it has not been transferred without your knowledge or consent. You can do this by contacting your local land registry office or checking online records.
  2. Use title lock services: Consider using title lock services to monitor your property title for any changes or suspicious activity.
  3. Be cautious of unsolicited offers: Be cautious of unsolicited offers from individuals or companies claiming to help you refinance or modify your mortgage.
  4. Keep your personal information secure: Keep your personal information, such as your Social Security number, secure and only share it with trusted sources.
  5. Use a secure mailbox: Use a secure mailbox to receive important mail, such as mortgage statements, and regularly check your mail to ensure that it has not been tampered with.
  6. Purchase title insurance: Purchase title insurance to protect yourself from any losses incurred due to title fraud or errors in public records.

By taking these steps, you can help reduce your risk of becoming a victim of home title theft and protect your property rights.

Resolving Issues with the Title

Any and all owners must sign the closing papers before the deal can be completed if it turns out that the seller of the house you want to buy shares ownership with another person. Prior to receiving a clear title, all unpaid taxes or judgments must be settled at closing. Any title concerns are the seller's obligation to resolve.

A title search will also reveal any easements, covenants, or rights-of-way that may restrict how you can utilize the land. Before closing, go over these documents to make sure you comprehend any possible effects.

Is Title Insurance Necessary?

Owner's title insurance is not necessary; only the lender's title insurance is. If a claim occurs after the purchase of the home, an owner's insurance can shield you from losing your equity and your ability to occupy the property. Because the land has had past owners and the builder might not have paid all of its contractors, faults may remain even if you're buying a brand-new home.

Some of the problems that an owner's title policy can defend you from are as follows:

  • Property survey errors
  • Boundary disputes
  • Errors on the property deed
  • Building code violations by a previous owner
  • Conflicting wills
  • Claims by an ex-spouse who didn’t authorize the sale
  • Claims related to a forged power of attorney
  • Liens from contractors, taxing entities, or previous lenders
  • A former owner’s unpaid child support
  • Encroachments
  • Improperly recorded documents
owner's title insurance

An owner's title insurance coverage can seem like a waste of money if you never need it, just like many other types of insurance. However, it's a small fee to pay to safeguard your rights in the event that your title is disputed after you close on your house.

Major National Title Insurance Companies
  • Fidelity National
  • First American
  • Old Republic
  • Stewart Title

The majority of these top insurers allow you to request quotations online by entering information about your mortgage. Professionals participating in the mortgage process, such as realtors, attorneys, and lenders, traditionally choose title insurance.

In Conclusion - A Guide on How to Protect Your Homeowner's Title

The article is about how to protect your homeowner's title when you are buying a property. It discusses the legal terms, the rights and responsibilities of homeownership, and the ways in which you can protect them.

Protect your home and, your peace of mind.

Also Read: Best Way To Find US Housing Sales Data

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Meet Amit Ahuja, a passionate and driven individual with a multifaceted interest in business and finance. Amit's curiosity for the world of commerce knows no bounds, as he eagerly delve into market trends, investment strategies, and entrepreneurial success stories. Always on the lookout for opportunities to grow his knowledge, Amit avidly follows financial news and actively participates in networking events to gain insights from industry experts.