Why You Should Not Skip Title Insurance

Every frugal shopper knows that those little extras that salespeople try to add on at the end in order to get you to spend more money are not worth it. How many times has a cashier said to you, as you were about to finalize your transaction, “If you buy X, you can also get Y at a discount”? You did not come to the store with the intention of buying X or Y, and your total would be less if you did not buy either of them. When you buy big ticket items, or even small consumer electronics, salespeople often try to talk you into buying additional warranties; most of the time, it is fine to skip those. Title insurance might seem like an unnecessary additional expense, like buying a warranty for your smartphone case, but it is not. By not having title insurance, you leave yourself vulnerable to a host of legal problems.

 Title Insurance Costs Less Than One Month’s Mortgage Payment

Divide the sale price of your house by the number of months in the term of your mortgage. For example, if the principal of your mortgage is $200,000, and it is a 30-year mortgage, you would divide $200,000 by 360 and get $555.56. Your monthly mortgage payment is probably a lot higher than that because of additional charges like interest and taxes. Title insurance is not, however, a monthly charge that gets tacked onto your mortgage statement every month. You only have to pay it once, when you buy the house. Title insurance is also refreshingly affordable; for homeowners, title insurance usually costs less than $400. In other words, 30 years of title insurance costs less than one year of car insurance, and in most instances, the seller agrees to pay the cost of the buyer’s insurance.

How Does Title Insurance Protect You?

Most people pay off their entire mortgages (or else sell their houses) without ever having to deal with any claims arising in connection to their title. These are some of the situations in which having title insurance can mean the difference between having paid $400 years ago and having to spend thousands of dollars on litigation:

• Liens on the property
• When someone has inherited the house from a previous owner, unbeknownst to you and to the heir
• Errors in the public record about the title to the house
• Fraud by the seller or a previous owner

In other words, if you cannot legally own title to the property (even though you have bought it), title insurance saves you from having to pay for a costly legal battle.

Contact the Law Offices of Eric Nesbitt About Title Insurance Claims

 For questions about title insurance claims or other real estate needs in Colorado, contact the Law Offices of Eric L. Nesbitt, P.C. at (303)741-2354 or info@nesbittlawoffices.com.