Title insurance is a type of insurance policy designed to protect home buyers, as well as creditors, from damage or loss. Most title insurance policies cover all general property claims, including unpaid liens, taxes, and conflicting wills.
There are two types of title insurance: owner property and lender property. Lenders will always require borrowers to obtain a lender's insurance policy before accepting a home loan, and the policy is usually issued by the title company to mark the completion of their title search. Title insurance company in NJ explains all closing documents in an easy-to-understand manner.
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Its main function is the same as the owner's policy: it protects creditors from possible losses in the event that the seller is unable to transfer ownership rights by law. The lender is guaranteed up to the amount of the mortgage. However, only creditors are protected from such a policy.
A title guarantee is a guarantee by the seller that they have the legal right to transfer the property to the buyer and that no one else can claim the property. If it turns out that someone else is demanding the goods, the guarantee provides legal protection to the buyer against the seller.
Depending on your insurance provider and the country you live in, policies can cost anywhere from $500 to $3,500. If the seller is the one who purchased the owner's policy, the price may be factored into the sale of the property.
The insurance process is usually initiated by a third party, such as a closing agent after the property purchase agreement is signed.