When you’re purchasing a home, the title insurance cost will be among the many small fees that you may not consider adequately. In most cases, the insurance is very affordable, relative to the purchase price of the house. The title insurance cost is usually around one-half of a percent of the total cost of the home. While this may not seem like all that much to pay, it has a huge effect on mitigating the amount of risk you take when you purchase the home. If you get a mortgage, this will be required as part of the deal, though it won’t necessarily protect you.
The title insurance cost is necessary, quite simply, because people aren’t always honest or thorough about their home sale. The insurance makes sure that the insurance-holder is protected against any financial damage that may occur as a result of individuals who aren’t quite honest about their debts related to the home. For instance, it may turn out that the seller used their home as collateral against a large loan and that the lender still has a legitimate lien on the property that affects your ownership. Unless you get this insurance for yourself specifically, it won’t help you in these cases.
Most often, the title insurance cost is used to protect the lender. In the above scenario, a homeowner may not end up owning the house due to the liens. The title insurance would come into play, making sure that the mortgage lender recoups their losses due to the scenario playing out. The homeowner must have their own policy in effect to get the same sort of protection. The title insurance cost is very small compared to the financial damages that it can insulate you against. There are ways to make it affordable.
Because the title insurance cost is a given where any home purchase is concerned, check to see who currently insures the title. Sometimes, that company may be willing to transfer the insurance to your lender and, thereby, to save you some money over the usual title insurance cost. It’s worth the additional cost to get the same protection for yourself that is enjoyed by the bank. A home is the most significant purchase most people will ever make. If you’re a real estate investor, not having this insurance may expose you to significant risks because of the amount of properties you may own.
The very low title insurance cost can sometimes be driven down even lower by a bit of shopping around. Especially in the present market, where home sales have slowed, these companies are vying for business more than is usually the case. They may be willing to significantly reduce the title insurance cost to get a new customer. Check with a few different title companies and see what they have to offer. If you have a realtor, you can take their advice as far as companies are concerned, or your own. You cannot be required to use a specific title company.
