Title insurance protects the interests of both home buyer and lender. Here’s how.
Getting title insurance is one of the standard steps home buyers take before closing on a home purchase. Title insurance is crucial for a home buyer because it protects you and the lender from the possibility that your seller doesn’t — or previous sellers didn’t — have free and clear ownership of the house and property and, therefore, can’t rightfully transfer full ownership to you. Even though the chance of calling on the insurance for coverage is relatively low, the value on what you stand to lose if you go without coverage is high — you could, in fact, lose the house itself.
Your escrow or closing agent will launch the process of getting you title insurance soon after your purchase agreement is signed. Usually your closing agent or attorney will choose your title insurer for you, from one of the five major U.S. title insurance underwriters.
You will probably need to shell out a one-time fee of around $1,000 for title insurance. (In some states or locales, however, the seller traditionally foots the bill.) The process is all very standard and likely to go through without a hitch.