When it comes to real estate transactions, one important aspect that often goes unnoticed is title insurance. Title insurance plays an important role in ensuring that the property you are buying or refinancing has a clear and unencumbered ownership history.
Title insurance is common with real estate transactions in Oregon, and it might benefit you.
Protection for the homeowner
When you buy a home, you want the assurance that you are the rightful owner and that there are no hidden issues with the property’s history. Title insurance provides this peace of mind by conducting a thorough examination of public records to identify any potential problems with the property’s title. If an issue arises after your purchase that threatens your ownership rights, the title insurance policy will cover your legal expenses and any financial losses.
Protection for the lender
Lenders mandate borrowers to acquire lender’s title insurance to safeguard their financial stake in the property. This type of policy guarantees the legitimacy and enforceability of the lender’s lien on the property. If a title issue emerges that jeopardizes the lender’s position, the insurance will step in to protect their financial interest.
Risk mitigation
Title insurance is important because it helps mitigate the risks associated with real estate transactions. Even with a thorough title search, unforeseen issues can surface that were not evident in public records. These issues could result in costly legal battles or even the loss of your property investment. With title insurance in place, you have a safety net to handle these unexpected challenges without depleting your savings.
The average title insurance policy costs between .5%-1% of the purchase price of the home and is usually required by the mortgage company.
