Is a Home Title Lock Necessary?

Your home’s title is a very valuable document. While you won’t see it until your mortgage is paid in full, your title should be kept safe and secure to protect you from title fraud. Since your home’s title is the all-powerful document when it comes to determine who owns it, and if any liens are placed against it, your home’s title is the target for many thieves. Here’s what you should know about a home title lock, including what it is and why you might get it.

What is a Home Title Lock?

A home title lock is a service offered by many companies, often as a monthly or annual subscription. With a monitoring service, you’ll receive alerts whenever court filings are made that may impact your home’s title. These alerts can make you privy to potential attempts at title fraud and help you stay ahead of other things that threaten your home’s title, like debt collection efforts.

What is Title Insurance?

Whenever you buy or refinance your home, a basic insurance policy is essential — although many people overlook it. Owner’s title insurance plays a crucial role in protecting your finances, like in the event where you’re refinancing and paying off Bank A in full with Bank B’s funds. If the money gets stolen on its way between banks, you could be legally liable for both mortgages.

Title insurance can help protect you from all types of mortgage fraud in many situations. For instance, owner’s title insurance, helps keep you safe if someone challenges your ownership of a property.

There’s a misconception that homeowners pay for good title insurance when financing or refinancing their home. In truth, the lender’s policy only protects the bank. Owner’s title insurance is essential if you want to protect yourself.

How is a Home Title Lock Different from Title Insurance?

A home title lock service is different than title insurance. You’re likely to subscribe to a company’s monitoring in addition to title insurance. After all, they’re two different services and work best in tandem.

A home title lock cannot replace title insurance, but it can complement it. With the right title insurance policy in place, a home title lock will help make you aware of potential threats as soon as possible. The team of experts can also help you understand the situation and get help from your title insurance company.

Of course, a home title lock isn’t insurance. This service will not help cover any of the financial burden of title issues or mortgage fraud, and that’s why a title insurance policy is critical to have alongside your subscription.

The Benefits of a Home Title Lock Subscription

A home title lock is a subscription service that helps protect you from things that may impact your home’s title, offering an early indication of mortgage fraud, among other potential threats. You’ll often pay monthly or you can opt to pay for a year upfront. You should consult each company’s prices and terms before subscribing.

When signing up, you’ll give your contact information, among other things, so that the provider can monitor your title’s status and any court filings relating to it. If a change is detected, the company has a team of experts who they promise will help you navigate through the circumstances.

It’s important to note that a home title lock is not a replacement for title insurance. That’s because, while the service will alert you to any changes, the company has no legal obligation to provide financial support to help you correct those changes or cover any financial burdens that come of them.

Is a Home Title Lock Necessary?

If you’re the type of person who sleeps better at night knowing you have the added security of services like a title lock, it may very well be a worthwhile investment. After all, you can cancel it at any time, so there’s no long-term commitment. Plus, many major companies offer it, in case you were wondering about the service’s validity.

However, financial experts point out that a home title lock doesn’t do anything beyond what you could already do yourself, for free. If you take the time to regularly check your property records on your county’s website — assuming your county offers convenient online access — you can save yourself the $15 to $20 a home title lock service generally costs each month.

Depending on your county, you may be able to automate the process in the event that they offer a consumer notification service. Some counties allow you to sign up to get a text or email if any changes impact your property record, like a change in ownership.

Pros and Cons of a Home Title Lock

If you’re on the fence about whether or not a home title lock subscription is worthwhile, consider these pros and cons.

Pros

  • It’s affordable. For about $150 annually (depending on the company you choose), you can have greater peace of mind knowing someone is keeping an eye on your title for you.
  • It’s convenient. Don’t have time to check your title yourself or maybe don’t live in a county with east online access? A subscription service makes sense.
  • It’s dependable. The on-going monitoring of a professional company offers more protection than randomly checking your title yourself when you remember.

Cons

  • It’s an expense. Being a subscription service, you can cancel at any time, but every dollar you put towards a home title lock service is a dollar you’ll never get back. Since it’s only useful as long as it’s active, you might want to think carefully before signing up.
  • It could be redundant. If you’re signed up for consumer notifications through your county or you’re willing and able to routinely check property records yourself, a home title lock is redundant and won’t offer any real added benefits.

 

Deciding if a Home Title Lock is Necessary

Still thinking about a home title lock subscription? As you make your decision, just remember that it’s completely optional. No lender or other party can require you to have it. If you’re still on the fence, consider heading to your county’s website or calling the offices to see what services your area offers.

If online property records and perhaps even a consumer notification system are already available to you, free-of-charge, you can very well do what a company will charge for on your own, for free. It just requires a few minutes of your time each month to consistently check your records.

The real estate process, from start to finish is a complex process with a lot of moving pieces and considering a title lock is just one of them. With LemonBrew, you will be supported throughout your entire real estate journey. With LemonBrew Abstract, we’ll help you navigate title insurance and the closing process to ensure your closing is on time. Get started today!

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