Real Estate Attorneys Answer Common Title Insurance Questions
One of the common aspects of closing a real estate deal is the purchase of title insurance. You may be wondering why title insurance is necessary since a comprehensive title search is part of the purchase process.
The attorneys of Barristers Title, a real estate title company that is a division of the law firm Cronin Bisson & Zalinsky P.C., drafted answers to some of the most common questions about Maine and New Hampshire title insurance that we hear in our office. To learn more or schedule an appointment at our location in Manchester, call us at 603-665-9495 or send us a message using our online contact form.
What is title insurance and why would I need it?
Challenges to the true ownership of a property can come from many sources, and stem from situations that may have occurred decades, if not generations, ago. Title insurance differs from regular insurance in that it protects you against title challenges with their origins in the past, instead of protecting you from future risks.
Even a comprehensive title search may miss a complex or very old title issue (known as a “defect” or a “cloud on the title”), and title insurance ensures that you will have the resources you need to confront a challenge if it becomes known after your real estate purchase.
What is the benefit of purchasing title insurance when I buy a property?
If you purchase a title insurance owner’s policy at closing, your right to own the property is protected – through a one-time payment – for as long as you own the property. You will be protected against claims on the title up to the monetary limits of your policy.
Also, while purchasing an owner’s policy at your real estate closing event may be optional, your lender may require you to purchase a lender’s title insurance policy. This policy protects the mortgage company’s interest in your purchase, and lasts until you have paid off your property loan.
How much does title insurance cost?
There are several things to understand about title insurance fees. First, it is common in New Hampshire for the seller to pay for the owner’s policy of the buyer. Second, buyers will pay at closing for a lender’s title insurance policy.
That said, title insurance fees generally run from 0.5% to 1.0% of the home’s purchase price. As noted, these fees are due at closing and typically added to the total closing costs for the property.
Our company’s staff members are happy to discuss the cost breakdown of title insurance and help you make the choices on policies that are best for you.
Can I purchase title insurance after closing?
Yes, you can. However, if you delay the purchase of title insurance, you could be responsible for resolving some common title challenges on your own, including:
- Errors stemming from mistakes made in entering your purchase in the public record
- Issues related to buying a property that is part of an estate (and the owner has died)
- Title challenges coming from property liens incurred by the previous owner if they did not promptly pay a subcontractor to make necessary repairs to the dwelling
Purchasing title insurance at closing protects you from situations such as these, from the moment you get the keys to your new home.
Who underwrites the title insurance issued by your company?
Barristers Title is a licensed agent for First American Title Insurance Company and Commonwealth Land Title Insurance Company. Contact us today for your real estate closing needs. Call 603-665-9495.