Even if you own a home, you may not be familiar with title insurance. You may remember hearing something about it in the lead-up to your closing day, but you might not know all the details about the lender’s title insurance policy you paid for when you closed on your home. World Wide Land Transfer can offer you service as a Pennsylvania, New Jersey, and New York title company.
If title insurance seems confusing to you, don’t worry; you’re not alone. Many homeowners don’t fully understand how title insurance works or how it protects you from costly title defects like liens, forged documents in the title chain, and competing claims of ownership.
Today, the team at World Wide Land Transfer would like to help educate you about title insurance and clear up some of the biggest myths we hear in our industry.
Myth: Title Insurance is an Unnecessary Closing Expense
When you’re spending hundreds of thousands of dollars on a home, it’s understandable that you might want to try and save some money on closing day by forgoing an owner’s title insurance policy. While it’s true that owner’s title insurance is optional in many states, going without it would be a big mistake. You may think it’s unlikely that a title defect will come up after your title is determined to be clear. You might be willing to risk it to reduce your closing costs. In reality, some of the most common title defects we see regularly can cost a tremendous amount of your money, time, and effort.
To resolve a previously unknown title defect, you may have to pay off a lien, remove structures from your property, or even hire a lawyer to fight for your ownership rights in court. Considering that the one-time cost of purchasing title insurance is relatively low, it’s clear that this expense is far from unnecessary and could save you thousands in the long run.
Myth: Your Lender’s Title Insurance Policy Will Protect You as the Homeowner
Many buyers think that because they paid for a title insurance policy during their closing, they will be protected from title defects. This is simply not true. Your lender will purchase a title policy to protect their interest in their loan but don’t make the mistake of thinking this policy protects you as well.
If you want to be covered in case of title defects that come up in the future, you will need to buy a separate owner’s title insurance policy, ideally before you close. Of course, it’s never too late to get covered, so be sure to purchase a title policy for yourself as soon as possible if you haven’t already.
Myth: Title Insurance is Too Expensive
While your title insurance premium will vary based on the value of a property and the area where it is located, to call it “too expensive” would be a stretch. When you consider the amount of protection title insurance provides compared to the value of the insured property, paying that premium on closing day is clearly worth the cost. If you want to know more about the cost of title insurance, check out our title fee and closing cost calculator.
Myth: Title Insurance is an Ongoing Expense
One of our favorite aspects of title insurance is that it provides a great deal of protection for a one-time payment. That’s right; the premium you pay when you purchase your owner’s title insurance policy covers you for the entire time you own your home with no additional premiums.
Your policy will even cover any heirs who inherit your home after you pass away! Can you think of any other insurance product that can potentially provide decades of coverage for a one-time premium? We certainly can’t.
If you are buying, selling, or lending money for a real estate transaction the team at World Wide Land Transfer will be happy to help you. We work with buyers, sellers, and lenders all over the country, so visit our contact page to find phone numbers for our regional offices and call to learn more about all the title insurance and escrow services we offer.
World Wide Land Transfer is a service-oriented PA title company with offices in Philadelphia, New York, and Washington, D.C. With a record of going above and beyond, we are trusted to close everything from complex commercial transactions to residential refinance and purchase transactions.