6 FAQs About Title Insurance
Title insurance is arguably one of the most poorly understood forms of insurance. Many homebuyers hear about it as they prepare to purchase their homes, but they don't understand its true purpose - they simply accept it as a normal part of the closing costs. Nevertheless, securing title insurance at the Lake of the Ozarks is a critical part of the home buying process. Today, Arrowhead Title, Inc. is here to help by answering some of these common questions about title insurance.
1. What Is Title Insurance?
Title insurance, as its name suggest, insures the title to a property. It is homeowners' first line of defense against hazards that may threaten their right to their property, such as unknown heirs, unauthorized signatures, mistakes in public records, invalid power of attorney, etc. Essentially, title insurance protects your (and your heirs') right to use and occupy the land.
2. How Much Does Title Insurance Cost?
Actual costs vary from state to state and closing to closing, but title insurance remains one of the most affordable types of insurance available on the market today. Whereas other types of insurance (auto, home, health, etc) require a monthly, semi-annual, or annual premium, title insurance is purchased with a one-time premium when you close on your home. After that, your policy will remain in effect as long as you or your heirs have a vested interest in the property.
3. Is There A Way To Eliminate Risks Ahead Of Time?
Yes! Title insurance policies are preceded by an in-depth title search, during which title professionals scour the public records in search of any issues that may need to be resolved prior to closing. Examples may include outstanding liens against the property, unpaid taxes, property easements, etc. By uncovering these issues prior to closing, they can be resolved before they become the sole responsibility of the home's new owner.
4. Are There Any Risks That The Search May Not Uncover?
Nothing is perfect, and there are certain hazards that may not arise until after the sale of the home is complete - sometimes not until years later. For example, the seller who signed the documents at closing could later be diagnosed as mentally incompetent, which would render his signatures unauthorized. Technically in this scenario, the original owners could step forward and claim that they still have a legal right to the property. Title insurance will cover the cost of legal fees required to combat these types of situations and protect your right to your property.
5. Is Title Insurance Required?
In many cases, buyers are not required to purchase an owner's title policy. Lenders will almost always require a lender's title policy, however, so they can be sure that their investment will be protected. Since you have to purchase a lender's title policy anyway, adding an owner's title policy will not cost that much extra - and it can be incredibly beneficial in the event that a title claim arises at a later date. We strongly encourage all buyers to purchase an owner's title policy when buying a house at the Lake of the Ozarks.
6. Do I Have To Get A New Title Policy If I Refinance?
Refinancing your mortgage creates a unique situation. Because you are still the owner of the same property, you typically do not need a new owner's title policy. However, you will probably be required to purchase a new lender's policy to protect the new lender as they invest in your new loan.
More Questions About Title Insurance? Contact Our Team!
Arrowhead Title, Inc. is owned and operated by a team of skilled, knowledgeable, and dedicated title professionals at the Lake of the Ozarks. If you are thinking about buying a home, refinancing, or if you simply have other questions about title insurance at the Lake of the Ozarks, don't hesitate to reach out to our team. We would be happy to help you in any way we can.
The Lake of the Ozarks' Most Trusted Title Company
Where Accuracy Matters!
1. What Is Title Insurance?
Title insurance, as its name suggest, insures the title to a property. It is homeowners' first line of defense against hazards that may threaten their right to their property, such as unknown heirs, unauthorized signatures, mistakes in public records, invalid power of attorney, etc. Essentially, title insurance protects your (and your heirs') right to use and occupy the land.
2. How Much Does Title Insurance Cost?
Actual costs vary from state to state and closing to closing, but title insurance remains one of the most affordable types of insurance available on the market today. Whereas other types of insurance (auto, home, health, etc) require a monthly, semi-annual, or annual premium, title insurance is purchased with a one-time premium when you close on your home. After that, your policy will remain in effect as long as you or your heirs have a vested interest in the property.
3. Is There A Way To Eliminate Risks Ahead Of Time?
Yes! Title insurance policies are preceded by an in-depth title search, during which title professionals scour the public records in search of any issues that may need to be resolved prior to closing. Examples may include outstanding liens against the property, unpaid taxes, property easements, etc. By uncovering these issues prior to closing, they can be resolved before they become the sole responsibility of the home's new owner.
4. Are There Any Risks That The Search May Not Uncover?
Nothing is perfect, and there are certain hazards that may not arise until after the sale of the home is complete - sometimes not until years later. For example, the seller who signed the documents at closing could later be diagnosed as mentally incompetent, which would render his signatures unauthorized. Technically in this scenario, the original owners could step forward and claim that they still have a legal right to the property. Title insurance will cover the cost of legal fees required to combat these types of situations and protect your right to your property.
5. Is Title Insurance Required?
In many cases, buyers are not required to purchase an owner's title policy. Lenders will almost always require a lender's title policy, however, so they can be sure that their investment will be protected. Since you have to purchase a lender's title policy anyway, adding an owner's title policy will not cost that much extra - and it can be incredibly beneficial in the event that a title claim arises at a later date. We strongly encourage all buyers to purchase an owner's title policy when buying a house at the Lake of the Ozarks.
6. Do I Have To Get A New Title Policy If I Refinance?
Refinancing your mortgage creates a unique situation. Because you are still the owner of the same property, you typically do not need a new owner's title policy. However, you will probably be required to purchase a new lender's policy to protect the new lender as they invest in your new loan.
More Questions About Title Insurance? Contact Our Team!
Arrowhead Title, Inc. is owned and operated by a team of skilled, knowledgeable, and dedicated title professionals at the Lake of the Ozarks. If you are thinking about buying a home, refinancing, or if you simply have other questions about title insurance at the Lake of the Ozarks, don't hesitate to reach out to our team. We would be happy to help you in any way we can.
The Lake of the Ozarks' Most Trusted Title Company
Where Accuracy Matters!
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