Owner’s Title Insurance: Is it Worth the Expense?
From lender processing fees and title work to escrowed items and closing costs, buying a home can be more costly than you might expect. As such, you might choose to save money by cutting any optional expenses in the home-buying process. An owner’s title insurance policy, however, is an option which should be carefully considered with any home purchase.
What is Title Insurance?
When a home or piece of property is bought, sold, or mortgaged, the transaction is filed with the Register of Deeds in the county in which the property is located. If you are purchasing a home or piece of property, a title search will be performed in order to ensure that clean title can be given to you for the property.
Although title searches are performed by experienced professionals, they are still human, and certain problems in the chain of title may be overlooked. These errors could cause a “cloud” on your title, meaning that you do not have a clean title to the property.
Should I Purchase an Owner’s Title Insurance Policy?
If you are obtaining a loan through a lender or mortgage broker, a lender’s title insurance policy will be a mandatory expense. The lender’s title insurance policy protects the lender in the event that a defect exists in the title to the property. Such a defect might put the lender’s security interest in the property at risk. This policy will remain in effect until your mortgage is fully paid or refinanced.
If you are purchasing a home or piece of property, an owner’s title insurance policy is an optional policy which you can purchase to protect your own interest in the property. While a lender’s policy protects the lender’s interest in the property, it does not protect your own interest in the property. An owner’s title insurance policy is a one-time purchase—generally just one hundred dollars depending on the price of property—and protects your interest in the property for the entirety of the time that you own your home. If a defect in title is uncovered, your title insurance company will defend your interest in your home, and the insurance company will pay for an attorney if you need one. In short, when it comes to the protection of your home, an owner’s title insurance policy is the wisest expense you could have which you hope you never have to use.
Purchasing a Home? We’re Here to Help
If you are in the process of purchasing a home in South Carolina, the Boger Law Firm is here to help you from contract to closing. Our office has forty years of experience conducting real estate closings, and has performed over 20,000 closings in that period of time. Put your real estate closing into the hands of an experienced attorney—to schedule your closing, fill out an online contact form or call (803) 252-2880 today.