Title insurance is an essential and necessary component of any real estate transaction. It secures your ownership interest from title defects for as long as you own your home. Title defects may include recording errors, title examination mistakes, fraudulent or false affidavits and deeds, and unidentified heirs just to name a few. The only way to eliminate the risk of a potential title defect that may adversely affect the marketability of your property is through the issuance of title insurance.

Title insurance policies come in two types: a loan policy and an owner’s policy. A loan policy insures the lender’s interest in the property to the extent of the balance of the outstanding mortgage. Loan policies are often required by the lender as a condition of the issuance of the mortgage. On the other hand, the owner’s policy protects the buyer from title defects up to the amount of the policy which is commonly the purchase price of the home.

The cost of title insurance is minimal compared to the protection it affords. Although charges may vary depending on the geographical location, title insurance costs less then 1.0% of the value of the property payable at closing and the best part is that it is a one-time premium.