Often homebuyers are presented with the option of purchasing title insurance. Other times, the purchaser is required to buy title insurance by the mortgage lender. Either way, title insurance protects you, the purchaser, and the mortgage lender. But first, what is title insurance? Why do you need it? Do you really need it?
Buying a property is an amazing process and there is a lot that goes into being able to make this purchase. However, how do you protect such a huge investment from any hidden surprises? By purchasing title insurance.
Minimize Your Risk
Title insurance is the safety net to protect you and your investment. It protects properties, whether commercial or residential, from losses that may be related to that specific property’s ownership or title. The word Title refers to the legal term that one has legal ownership and a property.
Some people are choosing to purchase a title insurance instead of conducting a land survey as it is generally cheaper to do so. Purchasing title insurance is also helpful for those who have a tight closing date and are not able to have a survey done on time. There is a one-time fee which will depend on the property’s value and on the insurance company you choose.
The title insurance covers things like:
- Title defects that are unknown – issues that may prevent you from having total ownership of a property
- Liens that may be existing against a property – example of this would be if the previous owner had unpaid debts which may secured against the property
- Issues with encroachment – for example, part of the neighbour’s shed is on the property
- Survey and public record errors
- Title fraud – which involves someone who has stolen personal information and has forged documents to try and transfer the title unknowingly to you and then disappear with the money
- Any other related issues towards the title that may hinder you to be able to sell, mortgage or lease the property in the future
Basically, title insurance allows you to have more piece of mind from unknown claims arising in the future. It is a sound investment for your new home in Saskatoon. It ensures you that you own your home free and clear.
There are some things that you need to be aware of that title insurance may exclude. Be sure to find out what the title insurance you are purchasing covers to reduce a problem in the future. A few things that it may exclude are:
- Environmental hazards – possible contamination of the soil
- Native land claims
- Problems with the property that could only be found through a land survey or inspection – for example, the property is smaller than it was disclosed.
- Unrecorded liens or encroachments
- Zoning bylaw violations – any changes, additions to the property or renovations
- Defects to the title that were revealed to you before the purchase
Remember that title insurance is not the same as home insurance and it won’t give you the same information as a land survey. Be sure to review your policy for the full list of restrictions, inclusions and exclusions, and also the terms and conditions.
All home purchases are different so be sure to check with your Rex Saskatoon realtor to discuss this valuable insurance. Give yourself that extra peace of mind that you own your new home fully, call now to ask your realtor any questions you may have at 306-373-7520.