What is NY title insurance?
January 21st, 2022 by Candis Hall
NY Title insurance protects a property owner against losses from defects in the ownership chain, including your lender. It’s important to have title insurance so you don’t lose your home if there are problems with the title when you buy or sell. You can purchase this insurance from title companies such as MacGregor Abstract.
Titles are essentially a legal record of who owns a piece of property and how it’s been transferred over time. But a lot can go wrong. Sometimes you can inherit property that isn’t properly titled to you, which leaves you vulnerable to losing it if someone else contests your ownership or the title was improperly recorded and doesn’t actually belong to you. Other times, a squatter may have established rights to the property that are superior to yours.
Title insurance is basically an all-risks policy that covers any issues that arise with that title. If someone successfully contests your ownership, the policy will cover any court costs or legal fees incurred when proving your ownership in court. If there are problems with the original title recording, the policy will cover those costs as well.
Most lenders require you to purchase title insurance as part of their loan requirements so they’re not on the hook for these problems if they come up after they’ve sold their loan to Fannie Mae or Freddie Mac. Some homeowners decide not to buy title insurance, but this is very ill advised, and will prevent you from getting a mortgage.
Title insurance protects a homeowner from any losses resulting from defects in the title to their property.
After you buy a home, you’re responsible for protecting yourself from problems with the title. This can involve more than just making sure there aren’t any liens against it. For example, if someone else’s name is still on the deed and they haven’t properly removed it, they’ll still be able to show up and claim an interest in your property. (Learn more about what to do if someone else’s name is on your deed.)
Most states require that homeowners have title insurance before they get a mortgage or transfer ownership of their property to others, such as when they sell their house. Title insurance protects people who have recently purchased property or are planning to refinance their home or get a second mortgage against losses due to defects in the title. In other words, it protects people who have some financial investment in the property against legal problems that could block their claim to the home.
What Is Title Insurance?
Title insurance covers losses caused by mistakes in paperwork required for buying or refinancing residential real estate. The policy also covers losses from defects in the chain of title and errors made by public officials when recording documents affecting ownership of real estate. Title insurance protects the buyer against loss from defects in the title to property. The policy covers such losses as may result because of defects in the title, errors in the chain of title, or incorrect descriptions of property contained in title documents. It also covers losses incurred as a result of someone else having rights to the property that are superior to those of the policyholder.
In other words, if you make a bad investment and it turns out the seller didn’t really have the right to sell you the property, your title insurance policy will pay off your mortgage lender and any other debts attached to your investment. You’ll lose your investment, but at least you’ll be able to move on.
The policy also pays off anyone who has a mortgage or other claim against your property if you die before the policy expires. It also pays for legal fees and court costs when there’s an ownership dispute over your real estate assets.
This is one area where it is not a good idea to try to save money by buying only lender’s mortgage insurance (LMI), which covers only the bank’s interest in your home. If there’s a problem with your title, LMI won’t help you recover any of your investment. Only full coverage will do that.