Yes, title insurance is a smart investment when purchasing a home. While it’s not legally required in every state, it protects you from unexpected title issues that could arise after closing. Without it, you may face costly legal battles or even risk losing your property.
What Does Title Insurance Cover?
Title insurance safeguards homeowners and lenders from financial loss due to property ownership disputes. Coverage includes:
- Fraud or forgery in past property transfers
- Undisclosed liens (unpaid debts attached to the home)
- Errors in public records (misspelled names, incorrect legal descriptions)
- Unknown heirs who may claim ownership after you buy
- Boundary disputes and survey errors
- Conflicting wills or missing heirs
- Mistakes in past legal documents that could affect ownership rights
Types of Title Insurance
- Lender’s Title Insurance (Required with a mortgage)
- Protects the lender’s financial interest in the property
- The borrower must pay for it, but it only covers the lender—not the homeowner
- Owner’s Title Insurance (Optional but highly recommended)
- Protects the homeowner from title issues that could threaten ownership
- Paid once at closing, offering coverage for as long as you own the home
- Available in basic or premium policies, typically a 30% price difference
- Covers legal costs if ownership is challenged
How Much Does Title Insurance Cost?
- Typically ranges between 0.5% – 1% of the home’s purchase price
- On a $300,000 home, an owner’s policy may cost around $1,500, but prices vary by state and provider
- Some states regulate pricing, while others allow you to shop around
- Discounts may be available if purchasing both lender’s and owner’s policies together
Why Should You Consider It?
Although not mandatory in every state, title insurance provides peace of mind by protecting against potential claims on your property. Without it, you could face significant financial burdens if an unknown issue arises. It’s a one-time cost that can save you from major expenses down the road, making it a wise investment when buying a home.
Ellen Wilson
703-864-3773
[email protected]
NMLS #591525
Licensed Mortgage Professional
Fidelity Direct Mortgage
8133 Leesburg Pike Suite 700
Vienna, VA 22182
