Title Insurance is like a safety net for Homeowners and Lenders.
A property's title (legal ownership history and rights to the property) can be subject to various issues or "defects" that may not be immediately apparent when purchasing a home. Title Insurance shields you from financial losses related to unexpected title problems like disputes, errors or hidden claims, and helps ensure that you have clear and undisputed ownership rights.
4 Reasons Why Title Insurance is Important:
1) It ensures that you truly own your home, giving you peace of mind.
2) Lenders insist require it, to protect their investment.
3) It guards your financial stake in your home, saving you from potential legal and financial headaches.
4) If any title issues pop up, it pays for legal defense costs.
How much does Title Insurance cost?
Typically, 0.5% - 1% of the home's purchase price, and you'll pay for it at settlement, as part of your "closing costs."
While title insurance rates themselves are mandated by the State of NJ, there are other fees involved, such as search, settlement, notary, overnight, and processing fees, etc., so there's nothing stopping you from shopping around, to ensure you're getting the best total overall cost.
It may even be worth checking with the Title Company which holds the current Owner's policy, to see if they offer a "re-issue" discount - BUT - the Owner must provide their policy document for this to apply.
In addition to your own Owner's Policy, you'll also (if using financing) need to purchase a Lender's Policy, but your Title Agent can give you a quote for both.
Who Orders the Title Insurance?
Your Title Company will likely be who is holding your Escrow Deposit, and the work they do to produce your Title Insurance Policy takes some time, so it's ideal to do your comparison shopping early, but no later than the end of Attorney Review, that way you will know who to make the deposit check out to, and so your REALTOR®️ or your Attorney (if you retain one) can place the order as soon as you're Under Contract!
