If you’re in the midst of the homeownership process, the question of “What’s the owner’s title insurance cost?” is something that’s bound to come up. In the midst of the home buying experience, it’s just natural to think about every little dollar that could get added to the bottom line. After all, this is one of the largest expenses of your life – and everything (including the owner’s title insurance cost) starts to add up relatively quickly. You should be watching every penny – and that’s where the owner’s title insurance cost comes in.
Wondering exactly what owner’s title insurance is – and more importantly, what it costs? That’s why we’re here to help! In this blog post, we’ll break down exactly what owner’s title insurance is and how much you can expect to pay for it.
What is Owner’s Title Insurance?
Before we get into how much the matter of owner’s title insurance cost, let’s answer the big question: what exactly is owner’s title insurance?
You may hear the terms “owner’s title insurance” and “lender’s title insurance” used interchangeably when it comes to the homeownership process. They’re protecting against the same thing – but with one big difference (we’ll get into that later). So, let’s focus on the “title insurance” part.
Unless you’re buying something a piece of property that is brand new from the ground up, the home or property you’re (potentially) acquiring will have an extensive list of prior owners. For older houses, this type of list can go on for generations and many, many, years. You’re just the latest in a long line of changed hands when it comes to the property’s dotted line.
Occasionally, up and down that line, errors can arise – ones that can throw a severe monkey wrench into the entire homeownership process. Sometimes, these errors are so bad that you could face severe financial or legal trouble as a result of them. As unlikely as it may seem, there are several problems that could rear their head – including:
- A long-lost claimant to the property. The people that sold you the property (or the people that sold THEM the property) may be sure that they have the right to put it up for sale – but what happens if someone down the line willed it to a different party or a new relative? That person could easily show up and put in a process-killing claim on your brand new place to live.
- Forgeries and impostors. Hard as it may be to believe, there are some people out there not as forthright as you and me. With all of the paperwork and forms that need to get filled out in the homeownership process, there is always the chance that someone, somewhere down the line, pretended to be someone that they were not. It’s not a common occurrence – but these types of forgeries and impersonations do happen.
- Debts, liens, and other money owed on the property. If you’re buying a property, the previous owners may leave you with a pile of money problems. Debts and liens from contractors or other parties could easily transfer over from the prior owners to the new ones – leaving you with plenty of bills to pay even after you have purchased the house.
- Errors in the public record. Again, the government or the various organizations involved in the real estate process can always make their own errors; if something’s missing in the chain of ownership, the process could go up in smoke.
Those are the most common problems – but there are plenty more out there. Everything from encumbrances (unwelcome parties putting in a claim) to easements (other parties allowed to use the land getting sold) could prove fatal to the overall homeownership process.
So what does title insurance do? Title insurance offers you the protection that you need for homeownership – just in case one of these situations does come up. It’s a way to safeguard one of the biggest purchases anyone will ever make.
Before we get into the owner’s title insurance cost, let’s also make clear one crucial distinction. Owner’s title insurance refers to title insurance purchased by the new owner of the house, protecting them from anything that might come up after the purchase gets completed. Lender’s title insurance refers to insurance purchased by the mortgage lender to protect their purchase. Most lenders will require you to purchase their title insurance; owner’s title insurance is usually an optional piece.
Now we come to the big question: what is the total owner’s title insurance cost?
The short answer? It varies. The amount you’ll have to shell out for when it comes to the owner’s title insurance cost depends on a whole host of factors. It will depend on the size of the property you’re buying, the location of the property, the size of the mortgage, the condition and age of the house, and many other elements of homeownership.
So the cost could truly vary – all the way from a few hundred dollars a year to well over a thousand dollars for a premium. A ballpark figure, however? Call it around $1,000 annually for owner’s title insurance.
Is that cost worth it? Each homeowner will have to decide. Think carefully about all of the factors that go into your home and the money that you’re going to lay out for the purchase and decide if that extra expense is worth the peace of mind you’ll get with owner’s title insurance. It’s a decision that includes a huge amount of variables – and we’re here to help with them.
When it comes to the question of what the owner’s title insurance cost might turn out to be, it’s natural to feel just a little lost. No need to fear, though – we’re here to help! If you’re looking for any guidance when it comes to owner’s title insurance or lender’s title insurance, check out LemonBrew Abstract. LemonBrew Abstract is the place to go for all sorts of innovative and helpful services that will get you through this key element of the homeownership process.
Another resource from LemonBrew to check out? Don’t miss the LemonBrew blog – with in-depth feature pieces on everything regarding homeownership or real estate. It’s the perfect resource for anyone in the process of buying a home, any real estate agent looking to grow their business, or just about anyone interested in the industry. Head over to the blog to explore pieces including “9 Negotiation Tactics When Buying a Home,” “7 Myths About the Mortgage Loan Process,” and “Title Insurance vs House Insurance: Do you need both?”
One last thing: be sure to check out everything LemonBrew can offer on the LemonBrew website. From matching with a real estate agent to lending to title insurance, we’ve got everything real estate covered. Check us out right here.