Title Insurance: Protecting Your Real Estate Investment
When you are investing in a piece of property, you need to understand the importance of your title insurance policy. As the buyer, your insurance policy acts as your guarantee that you will be the outright owner of the property. In addition, if you are taking out a mortgage, your lender will require it.
You will need either a real estate attorney or a title agent to help you get there. The team at Thompson Law Group, P.C. & Home Key Title & Closing, Inc. is led by lawyer Debra J. Thompson, who has over 20 years of experience in residential real estate. She likes to say that we have “the most wonderful, caring and experienced professionals in the industry.” Though our office is located in Westborough, Massachusetts, we also practice in New Hampshire and Maine.
What Does The Policy Cover?
In the real estate world, details are important. Even a small mistake can lead to a problem with your title in the future. Title companies meticulously research a property’s title history as part of the closing process to look for anything that might interfere with your future title. For example, they look for:
- Invalid transfer documents – Deeds, wills and trusts can all contain misspellings, missing names or incorrect legal descriptions of the property.
- Chain of title problems – Did someone die without a proper probate transfer? Is there pending legal action against the owner? The title search will identify these issues.
- Outstanding liens and judgments – We often expect to find an unpaid mortgage that will be paid off at closing. Sometimes we find unexpected items, however, such as mechanics liens, tax liens or legal judgments attached to the property.
- Easements – An easement allows a third party to use the property in some way, or prevents you from using the property, and can limit your enjoyment of the property.
The title insurance agent makes sure that any issues are addressed before closing and only issues the policy after they clear the title. The policy is your peace of mind that if any other unforeseen issues pop up in the future, the insurance company will cover the costs of resolving the issue.
Why Two Policies?
If you are taking out a mortgage to finance your house, a title insurance company will issue two different policies for your new property. These include:
- The owner’s policy – For many people, their home is their largest investment. Just as you carry homeowner’s insurance to protect against fire or storm damage, you should protect your interest in the property against the types of issues listed above.
- The lender policy – Most lenders will require a policy to protect their interest as a mortgagee on your home loan. Just like you, they want to protect their investment. In most cases, the mortgage company has a much larger financial risk in the property than the homeowner at the beginning of the loan.
We love answering questions for our clients. At any point in the process, if you need answers, we will be here for you. We want you to feel confident that you are in good hands throughout the process.