Wondering how to get a title insurance quote? This small (but critical) element of a house closing is something that must get done – but is something that often befuddles home buyers (especially first-time home buyers).
However, title insurance is one of the more critical elements of your insurance package, along with homeowners insurance, auto insurance, life insurance, and all other financial security measures that you need to have. Securing title insurance isn’t only a smart decision for your new dream home, it’s generally a legally necessary one!
So, what exactly is title insurance for your home – and how can you get a title insurance quote that you feel comfortable with? We’ll answer both of these questions in this in-depth blog!
What is title insurance?
Before we break down exactly how to get a title insurance quote, let’s break down exactly what title insurance is!
Title insurance is the protection you need to purchase when you close on your home that protects you against any title disputes on your home. While a home purchase may seem extremely cut and dried (you’d think someone that owns a home would be able to sell it, right?), it’s often not the case. However, the truth is that there are plenty of things that might pop up in the process that could derail a simple sale. Some of the more common ones are:
• Unexpected heirs or owners that pop up from the past. The owner may think that they actually own the property – but there’s always a chance that an unexpected great aunt or second cousin could actually be the rightful owner, mentioned in a will or a legal document somewhere.
• Debts or liens on the property. You’re already laying out a whole ton of money for the property you’re about to buy. The last thing you want to do is owe even more in debts or liens to a contractor that did some work on the house for the prior owner. As unbelievable as it might seem, you could still be liable for that money after you purchase the property.
• Forgeries are another problem. There’s a ton of paperwork in the homeownership process; there’s always the chance (albeit a very small one) that some unscrupulous person down the line may have forged a signature or entire legal document. If that’s the case, the whole purchase could be in trouble.
• Surprise owners or property users. You never know when you might encounter a “silent partner” who actually owns a chunk of the property, or when there’s some type of easement or regulation that allows a party (a neighbor, a business, a government entity) to use a part of the property. Any one of those implications can cause your purchase to fall apart.
Title insurance protects you from any problems that might arise for your purchase after a title search gets performed, giving you financial protection just in case the worst happens.
Finding the right title insurance quote
You have several different options for finding the right title insurance quote for your new home. It might be very easy for you; after you get your loan estimate from your lender, most lenders should provide you with a whole list of contacts to get a title insurance quote. This is generally a list of their favorite or preferred title insurance providers. You can feel free to contact these institutions to get a quote or perform your own search for a title insurance quote.
Here are some things to know about that search:
• Take your time. You don’t have to jump at the very first place that offers you a quote. Take your time and do a thorough search of all of the different options online. Compare prices, options, contracts, and all of the other different details of each offer before you make your decision.
• Ask around for some options. Odds are you might know one or two people going through the process of buying a home (or ones that recently purchased a house). There’s a very good chance these people will have some good recommendations for title insurance quotes or title insurance lenders that they’ve had excellent relationships with. Ask around to see how they can help!
• Title insurance isn’t cheap. The price for title insurance can vary from state to state and location to location, but in general, the price will come based on the amount of the mortgage. Expect to spend around 1% of your mortgage amount on the title insurance package.
• You can save some money on your title insurance by “packaging” the cost. If you’re looking to save some money on your title insurance cost, you do have some options. The first (and most effective) option is to package the title insurance and other insurance you owe on the house – homeowners, auto, etc. Often, those insurance packages could come from one specific company. The other option you have? Try to negotiate with the seller to include the cost of title insurance into the purchase price!
Navigating the world of title insurance can be tricky, so it’s important to have trusted real estate professionals to guide you through the closing process.
Be sure to shop around for your title insurance provider. Check to see if their rates are competitive, how they utilize technology, and if they can close on the timeline you have in mind. Once you’ve settled on a title company, your home buying journey will be coming to a close and you’re one step closer to owning your dream home!
About the Author: LemonBrew is a tech company for everything real estate, filling the gap in the industry by providing an end-to-end digital solution allowing home buyers and sellers to connect with real estate agents, find the right mortgage, and close smoothly. Positioned to be an industry leader with innovative technology, LemonBrew was named a 2020 HousingWire Tech100 Real Estate Winner.