It’s been said, and rightly so, that the decision to buy a home is one of the biggest decisions you will ever make. It certainly is. It can also be a very stressful experience, especially for first-time home buyers. There is so much involved in the process. It can seem like you are navigating a minefield and at risk of stepping on a landmine at every turn. First, you have to find the property you want to buy, then you make an offer on it. That’s when the fun begins. You need to wait and see if the seller will accept the offer, and if they do, there are inspections, title searches, and all kinds of little details necessary before you can actually start the closing process. The closing process is the process that will eventually put the key to your new home in your hand. All you need to do is get through the closing process, which typically involves not only the buyer and seller, but also a real estate agent or a title company, or both. There might even be lawyers present. Many first-time buyers don’t understand terms like escrow, title insurance, or even how taxes on a housework. Title insurance is important and should be considered when you are buying a home.

What is Title Insurance?

Let’s first examine what title insurance actually is. A title agency provides title insurance. Title insurance is insurance that protects the buyer of a property in case there are issues with the property not uncovered in a title search. When purchasing a home or property, there are a number of things that could go wrong with the sale of the property, even long after the property has been purchased. This is where title insurance comes in handy. There is an added expense for purchasing title insurance, but you can easily justify that expense when you weigh against any potential loss should there be a problem with the purchase of the property down the line.

Here’s how it works. You get a title when you purchase a home or property. That title says you are the new owner (or will be when you pay off the loan for the property with your lender). You buy a home or property with the assumption the person selling the home or property has the legal right to do so, meaning they have a free and clear title that can legally be transferred to you. This is typically the case, and there are usually no problems that arise to cause issues. Unfortunately, many issues could arise that might cause you to lose the right to your property even after closing on it. This is why a title search is done. Title searches can uncover issues that might prevent you from legally owning the property you have begun buying. Title and escrow companies often provide title searches for you to determine if a property truly has a clear title. They can also provide title insurance, which can protect you in case a claim against your property comes up at a later date.