What is Title Insurance and Do You Need It? - Money Tip Tuesday

If you’re shopping for a house, you’ve probably heard the term title insurance thrown around. But what exactly is title insurance? Do you need it? Get ready to have all of your title insurance questions answered. 

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Transcript: 

Welcome to Money Tip Tuesday from the Making Money Personal podcast. 

To start off, title insurance protects you as the owner of the property against any previous liens, judgments, tax issues, or ownership questions that may arise after the deed is transferred to you.  Whether you purchase a home with cash or through a lender, you as the owner have the option to purchase title insurance.   

There are two types of title insurance – owner's title insurance and lender’s title insurance. The first type of title insurance, owner’s title insurance, is a type of insurance protects the owner in the event that there are defects in a title on the property.  If the previous owner stopped paying for a service before selling the house to you, the service provider put a lien against your property which was not resolved prior to the title transfer. A lien is a legal right to a person’s property until the debt is paid and the lien is released.  In other words, if you don’t have title insurance, the previous owner’s debts are now your problem. While not mandatory, owner’s title insurance is a good idea to cover yourself and your property.  

Owners’ title insurance is important thing to have, but how much is it? The price of title insurance varies depending on where you live and how much you paid for your new property. It can range from anywhere between $500 to $3,500. The other benefit of it is that it isn’t a recurring fee, so once you buy it, you’re all set for as long as you own the property. 

The second type of title insurance is lender’s title insurance, which is mandatory. If you go through a lender or mortgage company, they will require you to get lender’s title insurance, so it protects them if the previous owner has any outstanding liens, judgements or past due taxes.   

If you have any questions about title insurance or even buying a home in general, Triangle Credit Union has a team of mortgage originators ready to meet with you to answer any questions you have, and they’ll help you find the right mortgage for your situation. 

If there are any other tips or topics you’d like us to cover, let us know at tcupodcast@trianglecu.org and don't forget to like and follow our Making Money Personal Facebook, Instagram, and Twitter pages and look for our sponsor, Triangle Credit Union on Instagram and LinkedIn to share your thoughts.  

Thanks for listening to today’s Money Tip Tuesday and check out our other tips and episodes on the Making Money Personal podcast.  

Have a great day!