Protecting Your Investment

When purchasing property, and when obtaining a mortgage for that property, the purchaser is required to obtain lender's title Insurance as a requirement of the loan.  The lender's title insurance policy protects the lender is there is ever a dispute or a defect discovered in the title of the property.  A title search is done prior to closing, but the title search only validates that the "chain of title" is clear of problems.  The title insurance protects the lender against those things that cannot be found through the title search -- such as forgeries, wills, clerical errors, fraud, deeds by minors, undisclosed or missing heirs and unpaid taxes (just to name a few).

As the buyer, you have the option of purchasing an owner's title insurance policy to protect your investment from the same type of title defects.  This policy will pay for the legal fees associated with defending any title dispute that arises, as well as reimburse you for any losses as a result of any title claim brought against you.  The price of the policy (one time premium paid at closing) is based on your down payment and becomes more expensive as you put more money down.  

Title insurance policies may differ, and you should check with the closing attorney for details on how and what your specific policy covers.