This is What Houston First Time Home Buyers Need to Know About Home Owner’s Title Policy
By Diana for First Home Houston
A home owner’s title policy help protects your property rights for as long as you and your heirs own the property.
Once you purchase owner’s title policy insurance, it will remain in full force as long as you own the property.
The original premium is your only cost as long as you own the property
There are no annual payments to keep your Owner's Title Insurance Policy in force.
There are two types of title policies. The homeowner’s title policy and the lender title policy. This article is addressing only the homeowner’s title policy.
The homeowner’s policy (also known as title insurance) protects the homeowner from financial losses resulting from outstanding taxes, right-of-way problems and issues with related public records. This is not a mandatory policy.
Homeowner’s title policy is optional
The Texas Department of Insurance (TDI) is in charge of setting the rates.
Title company is responsible for conducting a thorough title search. Essentially a history of the property to uncover any judgments, liens, or other encumbrances that may be an issue.
Once the search is completed, a title commitment is issued to obtain title insurance.
The commitment usually details, among other information, all conditions that must be met before a policy can be written.
The policy has five sections that includes covered risks, exclusions from coverage, Schedule A, Schedule B, and the Conditions.
The cost of title policy depends on the value of your home and usually falls between 0.5% to 1% of the purchase price. Essentially, if your new home purchase price is $400,000, the cost of your home owner’s title policy will be between $2,000 – $4,000
Here in Texas, the seller usually pays the cost for the owner’s title policy, and the buyer pay the cost for the lender’s policy. However, do keep in mind that both seller and buyer can negotiate who will pay and how much.
As a home buyer, you can also opt for extra protection. You will need to speak with the title company regarding extra protection coverage.
Any dispute regarding your property’s title including problems with document recording, must be addressed with the title company immediately.
I know there is a lot that goes on when you are in the process of buying a home. However, because this is of the utmost importance, it will be worth it, to take some time to read through your policy. Of course, if you have any questions and or concerns, they can easily be answered by calling the title company. As always, we thank you so very much for stopping by today. Until next time…Diana
Please note, the author does not guarantee, warrant, or represent the accuracy, adequacy or completeness of any information herein and shall not be responsible for any errors or omissions for the results obtained from the use of such information. The information provided on Firsthomehouston.com is for educational purposes only and is not intended to be used for legal advice or professional service. If legal advice is required, the services of one’s own attorney should be sought.
