What is title insurance and do you need it?
What is Title Insurance?
Are you purchasing a new home? It is important to protect your investment – a title insurance policy does just that. A title insurance policy is a security investment towards protecting one of the biggest purchases many people will have in their lifetime – their home.
There are two types of title insurance policies:
- Homeowner policies
- Homeowner policies will protect the homeowner in a property transaction.
- one-time purchase.
- Lender policies
- Lender policies will protect the lender’s interest in your mortgage and are also a one-time purchase.
- It is important to note that most mortgage lenders will require a lender policy in order to issue a mortgage loan.
Both policies working together protects both the homebuyer and the lender in the case of any issues that may arise with the property.
Why homebuyers should obtain title insurance?
While title insurance is not a requirement in Ontario, it is important for homebuyers to speak to their lawyer or insurance representative about their options. There are many issues that may arise after finalizing the purchase of a new home – some examples may include:
- Title fraud and unknown title defects, including any issues preventing the homebuyer from having the total ownership of the property.
- Existing liens against the property’s title, including unpaid utilities, mortgages, taxes, or condo fees.
- Survey and public record errors, as well as encroachment issues. Encroachment issues may not arise for years into purchasing and settling into a new home.
- Other issues that may affect the ability to sell the home in the future.
Title insurance will protect the homeowner against any losses that may be suffered as a result of these issues, for as long as they own the property. As title insurance is only a one-time purchase, we always recommend investing in both policies. Many of the issues described above may not arise for several years into settling into your home. Imagine a homeowner renovating their home and then discovering their property is encroaching on another property. Title insurance would protect against these types of issues.
When can homebuyers purchase title insurance?
A home buyer will normally purchase title insurance when purchasing a property. However, title insurance can be bought at any time for as long as they own that property. As mentioned earlier, most mortgage lenders will require that the home buyer purchase a lender policy. We think it only makes sense they purchase homeowner insurance at the same time for a one-time cost.
How to purchase title insurance?
It is easy to purchase title insurance – homebuyers should speak to their lawyer or insurance representative to be taken through all their coverage options. It generally takes about 2 weeks to process an application for title insurance.
What we do for our clients
We understand the complexity in purchasing a property. We help to make the entire transaction easy for our clients. We will review the offer to purchase and perform all the necessary due diligence to ensure our clients are able to make a well-informed and safe decision.
If you are in the process of purchasing a property, or you currently own an uninsured property, please contact our office at (613) 286-2169 or by email at email@example.com. We would be happy to discuss your options with you.