In many states, like New York for instance, Title insurance is required on every home purchase and refinance transaction. It is important as a homebuyer to know that you also have the right to shop for and choose your own Title Insurance Company. This economy is consumer driven. In theory, you cannot legally be forced to pay for something that you do not want or feel it’s overpriced. The law backs this up by letting consumers (you) research, inquire about, price and choose your own Title Insurance Company.
That’s right; you do not have to pay the absurd fees that other entities may try to force on you when it comes to Title insurance. You do in-fact have the right to shop for the best bang for your buck when it comes to Title insurance.
So what is Title Insurance exactly?
Title insurance can help provide the home buyer and the mortgage lender necessary protection against losses resulting from unknown defects in the title to your property that occur prior to the closing of a real estate transaction.
Unknown defects in a title, such as any outstanding liens on the property (e.g. unpaid real estate taxes by a prior owner) or encumbrances (anything that might hinder the owner’s right of ownership: e.g. errors or omissions in deeds, undisclosed errors, fraud, forgery, mistakes in examining records), can result in additional costs in the future or even invalidate a home buyer’s right of ownership in the property, and might also invalidate the lender’s security interest in the policy. Title insurance policies will cover the insured party for any covered losses and legal fees that might arise out of such problems.
