The twists and turns of buying a new home can be dizzying, but it’s important to understand some steps are just necessary.

Title insurances fall under that category.

Lenders’ and owners’ title insurances are some of the protections you’ll have to sign off on, even when you’re buying a newly built home.

The lenders’ insurance policy will be issued in the amount of the loan as a means of protecting the bank’s security interest.

Title insurance is a one-time fee paid by the borrower as a way to ensure that the property is free of liens or any other encumbrances or holdups. New homes apply because the land on which the home is built can include undiscovered items.

During a typical residential transaction, the title insurance policy is often required by the lender, but it will not protect the interest of the homebuyer. This makes it necessary for a separate owner’s policy.

An owner’s title insurance is also issued in the amount of the purchase price and is continuous as long as owners and their heirs keep the property. What it does is track potential risks before a transaction is completed. If something goes off-track, the policy will come to the rescue, covering court costs and other related fees.

For those buying a new home, one of the biggest reasons for this protection is due to mechanic’s liens, which arise from unpaid bills from roofers, carpenters, public and the like.

The policy goes beyond this possibility, as well. It may cover errors made by the recorder’s office when a properly filed lien can’t be located in the system. Unwelcome surprises are not uncommon and can occur at a moment’s notice, despite how smoothly the home-buying process moves ahead.

Title insurance provides peace of mind and protection against the unknown. Always remember to ask your real estate team questions about this insurance.

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