You’ve filled the bookcases, fluffed the pillows, and the last photograph is nailed to the wall. You stroll out to your new mailbox to discover devastating news: a lawyer’s letter detailing a property lien against a previous owner, and now that expense is all yours.
Title insurance could be your wake-up call from this homeowner’s nightmare.
Title insurance can protect you against any problems with legal ownership of a home. Any outstanding financial expenses placed as a lien against a home’s value can put your investment at risk.
A title search—as part of the mortgage process—should usually turn up any legal claims or rights attached to the house. So, for most people, that search will prevent these problems.
But no matter how careful, a title search can’t rule out a relative of a seller running a good night’s sleep with paperwork that appears to give them claim to a property. Or maybe the paperwork was filed improperly. That’s why insurance is so important.
Here are 4 (unfortunately) common homeowner’s nightmares where title insurance will save the day:
1. Cousin Fred stakes a claim
Sometimes a distant relative or an ex-spouse might surface with a claim that they actually own the property.
Typically, a judge will sort out the case and you could be faced with buying that claimant out. That could mean losing your down payment and even all the principal you’ve paid into the house. Not to mention court costs. Other options could be negotiating costs, or even sharing the house
Title insurance covers all that.
2. Those meddling neighbors
No need to keep up with the Jones’ next door—unless that deck-and-shed combo they built turns out to be on your property!
Title insurance will pay the cost of any legal battle or efforts to settle the matter and have the item removed from property that is legally yours.
3. The case of the missing mortgage
Paperwork, paperwork…. Just as with liens, it’s possible a title search might not uncover an old mortgage until after closing because it was posted incorrectly with the Parish. That means filing a claim and using title insurance to pay the old mortgage off.
4. And beware the unpaid taxes
Sometimes a buyer will receive notification of delinquent back taxes after closing. And that bill could be heavy—unless the buyer has owner’s title insurance.
Even if the chances are low that past owners or outstanding taxes might turn up, it’s worth it to talk to your title company about title insurance. If, as the owner, you’re on the fence about buying the policy, ask yourself a hard question: how you would handle the loss of equity and possible relocation expenses if you were to suddenly wake up to a title-related nightmare?
With a blend of personal flavor and professionalism, Clean Title, LLC, works to ensure our clients know exactly what’s happening every step of the way, so that they can feel confident that when they sign on the dotted line, they’re signing to turn a house into a home. We’re proud of the reviews our clients have offered. You’ll see these recommendations on our Facebook page and details of our services on our website. Or call 985-277-5095 for details today!