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Chris Lefebvre's Real Estate Blog

Boston Area and Southern New Hampshire Real Estate

By Chris Lefebvre | Managing Broker in Methuen, MA

Buyer's Title Insurance

If you have bought a home before and financed it through a mortgage lender, then you most likely have purchased title insurance before.  Lender's require title insurance to cover them in the event of any title issues that come up after closing.  For an example, a long lost relative of a previous deceased owner surfaces that claims that the house you just bought is actually his.  If the claim is legitimate and a judge awards ownership to the long lost relative, the title insurance policy that you paid for would kick in and pay off the mortgage balance with the lender.

Okay, so wait a minute, I put 20% cash down at closing and the title insurance policy just paid off the mortgage balance representing 80% of the purchase price.  What happens to my home buyer's equity?  Surely the policy that I paid for at closing will cover this as well?  Unfortunately, this is probably not the case, it only covers the lender.

However, unbeknownst to a lot of home buyer's, you can purchase a title insurance policy that would cover you as a home buyer.  It is a small investment that every home buyer should consider.  Cash buyer's should also seriously consider buying title insurance at closing as 100% of your investment could be at risk if there is a title issue after closing.
 
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