I don't care if I buy a new home or a used home I will always buy title insurance. I can't believe how many people don't buy title insurance when buying a home. The downside to not having a clear title to the home is tremendous and the cost of preventing this problem is only a few hundred dollars.

When you borrow money from a lender to buy a new home you will be required to pay for title insurance. This title insurance is for the lender and covers them only. You will be given the option to purchase your own title insurance at the closing. Typically the cost is two or three hundred dollars. This insurance, should you decide to buy it, will protect you from any defects in the title. Before the closing the attorney will order a title search which looks for liens against the home and to make sure the property has a clear title.

The purpose of title insurance is to protect you against any unforeseen problems or claims against the property. You will be charged a one time fee for this protection. If you don't buy title insurance and your attorney did not do a good job with the title search you could be held liable for existing liens against the home. You could owe someone thousands of dollars for work done on the house before you bought the home or because there is another property owner that you did not know about.

The bottom line is for only a couple hundred dollars you can protect you from the unexpected title problems and gain a little piece of mind.


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