Protecting Your Purchase of Real Estate Through Title Insurance

There are many aspects that come with buying a home, one of the most important being its title. When you obtain the title to a property, you officially become the legal owner of that property. The title of a home provides us with important information such as who owns the home and who may have a claim to that piece of property. Obtaining title is not always a simple process and problems can arise even after the property has been purchased. Therefore, it’s important to keep yourself protected through title insurance.

Title insurance is a requirement for homes bought in Pennsylvania that are in any way financed. It differs from other types of insurance in that it focuses on the idea of risk prevention, rather than risk assumption. Title insurance policies are designed to protect home buyers and mortgage lenders from damages or financial losses arising from issues or defects with the property’s title after purchase. Such policies will shield the insured party from any covered losses as well as any legal fees that may arise in an effort to resolve any disputes. Having title insurance will allow the buyer to ensure that they are getting title to the property free and clear of any potential issues.

There are two different types of title insurance; there is a lender’s policy and an owner’s policy. A lender will always require a lender’s title insurance policy to be purchased by the borrower before obtaining a home loan. This type of policy is normally issued by a title company to mark the completion of that company’s title search on the property. A lender’s title insurance policy ensures that the lender has a valid, enforceable lien on the property to serve as protection against potential losses. On the other hand, an owner’s insurance policy is not required, but can be purchased as an added precaution. This type of policy will act as a guarantee against potential hazards and generally protects the home buyer from the most common risks including, but not limited to, conflicting ownership claims, outstanding lawsuits, erroneous or flawed public records, outright fraud and/or forgery, and undisclosed easements or other agreements that may limit the usage or reduce the value of the property.

It’s important to note that title insurance does not protect against all things, such as defects to the property formed after the policy is created, missed mortgage payments, liens on your property from your own debts, violation of zoning or building ordinances, and failure to abide by the law. However, title insurance still offers reasonable and prudent protection to a homeowner and/or a mortgage lender. Having a title insurance policy provides peace of mind and financial protection for both the buyer of the property and the lender in case of any unforeseen issues that may arise with the property’s title after purchase. Title insurance also allows the mortgage lender to be protected from any financial losses due to covered risks. Such protections will last for as long as the homeowner owns the property. Not having a title insurance policy will expose transacting parties to significant risks in the event that a title defect is present.

If you or a loved one is facing disputes related to your title on a home, or simply need guidance on how to protect yourself from any issues that may arise from a property transaction, the attorneys at Musi, Merkins, Daubenberger & Clark, are here to provide you with the advice you need to perform necessary due diligence, make informed decisions to avoid potential future problems, and protect your investment. Call us at 610-891-8806 to set up an appointment today.