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    What is Title Insurance and Why You Need It

    When you buy a new home, you move in trusting that it is all yours. The home, the yard, all of it. Then one day you get a notice stating that someone has a lien on the property that either wasn’t disclosed in your home purchasing contract or the sellers didn’t know someone had a lien on the property. Maybe a second mortgage went unpaid, or the property is actually caught up in an issue with an inheritance from a past owner. There could be a number of reasons someone would send a notice like this. Obviously, no homeowner ever wants to receive this kind of notice about the property they just bought. This is why you purchase title insurance when you buy a home. Let’s take a closer look at what title insurance is and why you need it.

    What is Title Insurance and Why You Need It

    What is Title Insurance and Why you Need it

    Title insurance protects against someone or some entity like a bank or court process taking your new home from you if it’s uncovered that there’s an issue regarding the title or ownership for your home. If someone in the past that owned this home had used this house as collateral to get a business loan and then didn’t repay this loan or if someone previously executed a fraudulent deal with the home or paperwork, you could have serious issues to contend with.

    Title issues do arise, and that’s why it’s advised to purchase title insurance. When you are buying a home, your title company will run an initial check to see if there are any outstanding liens on the home you plan to purchase and they will give you this information in a full report. If something isn’t reported or doesn’t come up in their report, it’s impossible for them to know if there is something that could pop up in the future. Thanks to title insurance, you will be protected for longer than just this initial purchase time frame.

    Who Pays For Title Insurance?

    This is an insurance policy you buy just once, and it covers you for the lifetime of the ownership of this home. You as the new homeowner will cover the cost of this option and it will be part of your closing costs. It’s really simple to acquire your title insurance; your real estate attorney or title company will order it.

    Do You Need Title Insurance On A New Home?

    If you have a loan, you will need a lender policy to take care of the bank’s interests in the home. If the title insurance is activated because of an issue that comes up, the lender’s fees and mortgage payments will be covered based on the policy. You are also welcome to purchase a homeowner’s policy to cover any problems that might come up because of a claim that is filed against the property.

    If the incident isn’t fully covered and handled with the lender’s policy, and the problem continues, you might need your policy to protect you on your end regarding costs and payments. Sadly, you could still lose the home, but monetarily you should be secured. And remember this type of home purchase issue is rare, but you want to do everything you can to protect your interests when you go into a large purchase like a new home.

    Working With An Experienced Memphis Area Real Estate Agent

    When it’s time to sell your existing home or buy a great new place, turn to a highly regarded and well-informed local real estate agent. You want someone that you can trust to give you the best advice and know-how for your new home purchase or sale. Check out my other great articles to help you through your home selling and buying experience here in Memphis.

    Take a minute to learn more about me. With over 15 years of top-notch service for my clients, I can guide you with your house sale, new home purchase, or buying a great parcel of land. As a top, licensed real estate agent in the Memphis area, showing you the best properties for you and your family is my goal!

    Contact me at (901) 828-8919 or drop me a quick note at angie@angiekelley.com and we can speak in person about your plans and options. Ask me about seeing homes for sale by video or virtual tour and find the best place for you!

    Angie Kelley, Crye-Leike Realtors
    (901) 828-8919 or (901) 756-8900