With that significant accomplishment, you should look at obtaining a Title Insurance Policy. What most people don’t realize is that when you had a mortgage, the lender will likely have had this in place for you. Once your mortgage is paid out in full, the insurance is no longer in place. It is crucial that once your final payment is made that you, as a homeowner, now get a policy.
What is Title Insurance? Good question!
Title Insurance protects you, the homeowner. It’s not like traditional insurance in that it does not ONLY cover things that might happen, but it also covers things such as property defects that have already occurred in the past.
A title insurance homeowner policy will cover:
- Forgery – If someone forges your signature on a registered document that entitles them to sell or mortgage your home.
- Duty To Defend – If you experience title risk, the policy will cover the legal fees and costs associated with restoring and protecting your title.
- Lack of Building Permits – Prior to purchasing the home, if there were renovations performed without the proper building permits you may be required to remove or fix the structure.
- Fraud – If someone fraudulently transfers your property without your consent.
- Encroachments – If a structure built by a previous owner is outside the property boundaries, or if a neighbour builds a structure that is on your property.
Title Insurance offers you peace of mind if anything should happen to your property once you are the owner. It is relatively low cost, on average coming in at $200-$400. It is a one-time purchase and does not need to be purchased each year. More than reasonable right?
If you are still on the fence about obtaining title insurance, we’ve recently had a client who experienced title fraud:
A woman went to her bank to make a payment on a line of credit that was secured by a mortgage on her property. When she arrived, she was told that her $30,000 line of credit had been paid in full and that according to the lawyer who sent the funds, her house had been sold.
This left her quite perplexed, so she followed up with the land registry office. They confirmed the sale of the property for $350,000 and that a new mortgage was registered on the property for $325,000. The woman was stunned to find out that she had been the victim of a title fraud scheme—and that the fraudsters had collected $350,000 on the deal.
Thankfully, in the above case, the woman was covered by a Title Insurance Policy which fully covered all her legal fees to remove the mortgage from the title and rightfully transfer it back to her. Having the coverage saved her approximately $12,000 in legal fees, time, and stress.
Your home is a sizable investment and one you worked hard to purchase! Title Insurance can protect you and your property should there be anything that comes up. For the $200-$400 it costs, we feel that’s a low price tag for peace of mind. Ready to get a quote? Let us help you by contacting Dominion Lending Centres mortgage professional to set up your Title Insurance Policy!