Why Is Title Insurance So Expensive

 Let’s start with “The Title”. This is what gives you ownership to the property.

  
      As a Seller or buyer you want a clear or clean title — one that doesn't have liens for unpaid taxes against it, or claims of ownership by a faraway aunt or uncle, or a surprise easement through the backyard to reach power lines or a cell phone tower.

As for your lender, he wants to know that the loan is going to a legitimate transaction — the seller really does own the property and therefore can sell it to you.

In other words, nobody wants an unpleasant surprise after the settlement. So a couple of things happen. First, a title search is conducted. Public records are examined manually or by computer or both. he searcher looks at deeds, wills, and trusts, tracing the history of the property back many, many years. Among the important questions is whether all past mortgages and liens have been paid. Does anyone hold an easement? Are there any pending legal actions?

But what if the title search misses something and it comes back to bite after the buyer moved in? This could happen. Buyers have even been known to lose their houses because of clouded ownership — some past problem that wasn't discovered.

The way to avoid losing everything is to buy title insurance, which is available from title insurance companies.

Title insurance is a one-time, up-front investment with rates based on the purchase price of your home. Texas Title Insurance is State Regulated. The State Board of Insurance sets the rates. They have gone down twice in the last few years.

The policy protects you by making the insurance company liable for most claims against your ownership. If a critical document was overlooked during the title search and you actually lose the house, you'll likely receive damages — but only if you bought an owner's title insurance policy at closing. You can see why experts advise you to do this.

Your lender wants a policy, too. He or she won't even loan you money unless you buy a separate lender's title insurance policy to cover the bank's interest in your property. The lender's policy should be for the amount of the mortgage.

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