Why You Should Consider Title Insurance
Updated: Jun 10
Did you know 1 in 4 property titles has an issue nationally? Property owners can run into trouble with deeds, undischarged mortgages, and the property itself. That’s why we always recommend getting title insurance.
Title insurance is a one time cost that you pay at the time of closing. Title insurance can protect you and pay the costs of a title deficit, or pay for a lawyer to protect you for different legal claims.
It will help you when you’re looking to buy a property, and then later on when you’re looking to sell that property to someone else. If you’re still wary of whether it’s a worthwhile investment, here are some examples we’ve helped clients deal with easily because of title insurance.
Example 1 - Prior Undischarged Mortgages
One common example we see is prior undischarged mortgages. Sometimes property owners finish paying back all their property loans, but the lender doesn’t finalize these payments and discharge the loan. This can create a “cloud” on their property title that needs to be legally sorted before they can sell the property to anyone else.
If you’re a buyer with title insurance, the insurance will cover your costs to get a lawyer to sort out the “cloud” on the property you’re hoping to buy. This process usually goes much faster when the original property owner used a local lender, because it’s easier to track down the old payments. This is just another reason to use a local lender.
Example 2 -
Another case we helped with, was when a buyer was looking to close a deal on buying part of a property that was subdivided. The property was brand new, and they messed up the deed, accidentally stating that the purchase was for the entire property, not one of the subdivisions.
Since our client had title insurance, their costs were covered, and their title insurance company was able to efficiently fix the legal issues with the property deed.
Another common issue can be property lines. One homeowner was going to sell their house, and the new buyer organized a survey of the property to inspect exactly what land was theirs. The survey revealed that a portion of the house actually encroached on the neighbors property.
This problem can be sorted out by either agreeing on a new boundary line with all involved legal parties, or agreeing with the neighbors on an easement which would legally allow the house to partially encroach on their property. The homeowner didn’t have to pay out of pocket, because title insurance paid for the cost of these legal issues.
If you’re looking to buy or sell property, contact us at Hudkins Law. We can schedule you for a complimentary consultation and help talk you through title insurance for your property so that you’re better prepared in the future!