WHY TITLE INSURANCE IS YOUR BEST FRIEND WHEN BUYING A HOME IN PHILADELPHIA

The following information was released by the office of the Mayor of Philadelphia:

James P. Leonard, Esquire Department of Records

Buying a home is probably the biggest purchase you'll ever make. You've saved up for years, found the perfect house, and you're ready to sign on the dotted line. But have you thought about title insurance?

If you're like most people, you might be wondering: What's title insurance, and why do I need it? The answer is simple: it protects your home and your money from problems you never saw coming.

What is title insurance?

Think of title insurance like a safety net for your home ownership. When you buy a house, you're not just buying the building you're buying the legal right to own that property. This right is called a title.

But sometimes there are hidden problems with that title that nobody knows about until it's too late. Title insurance protects you from these surprise problems that could cost you thousands of dollars or even your entire home.

Real problems that happen to real people

According to the American Land Title Association, these aren't just scary stories they actually happen to homeowners:

The Surprise Lien: A couple in Missouri bought a house from their landlord. What they didn't know was that the previous owner had taken out a huge loan and put a lien on the property. Even though they were making their mortgage payments, the bank tried to take their house away. Luckily, they had title insurance, and the insurance company paid off the lien so they could keep their home.

The Fake Owner: In Virginia, criminals were selling houses they didn't actually own. They would find vacant properties, fake the real owner's death certificate, and then sell the house to innocent buyers. When the real owners showed up, the buyers lost both their home and their down payment unless they had title insurance.

The Underground Surprise: You finally buy your dream home and want to add a deck or expand your basement. You hire a contractor to start the work, but they discover an underground utility line easement, not disclosed on your title search prior to closing, running right through where you planned to build. Without title insurance, you're stuck addressing the utility line issue yourself.

What does title insurance protect you from?

Title insurance protects you from many issues, including unpaid mortgages from previous owners, unpaid prior owner property taxes that become your problem, child support liens attached to the property, missing heirs who might claim they own your house, easements missed in your title search that limit how you can use your property, fraud and forgery in property documents, and mistakes in public records.

Two types: Know the difference

There are two types of title insurance policies. A lender's policy protects your mortgage company. Most lenders require this, but it only protects them not you. An owner's policy protects YOU. It covers the full purchase price of your home and lasts as long as you or your heirs own the property.

The lender's policy does NOT protect you. You need your own owner's policy to be fully protected.

The bottom line

Title insurance costs about half a percent to one percent of your home's purchase price. That's a one-time fee you pay at closing, and it protects you for as long as you or your family own the home.

Buying a home without title insurance is like driving without car insurance. You might be fine, but if something goes wrong, you could lose everything. For less than the cost of a nice vacation, you can protect the biggest investment you'll ever make.

Remember: you have the right to choose your own title insurance company. Shop around and ask questions to make sure you're getting the best protection for your investment. Your home is more than just a place to live it's your family's security and your financial future. Protect it with title insurance.

Why the Department of Records cares about this

As Philadelphia's official recorder of deeds, the Department of Records maintains the public record of property ownership in our city. We record your deed when you buy a home, making your ownership official and public. But recording a deed doesn't guarantee that the title is free from problems that's where title insurance comes in.

We see the consequences when homeowners discover title problems after the fact. Title insurance protects you from issues that may exist in the property's history, even before you bought it. Our mission includes protecting Philadelphia homeowners and preventing property fraud. Encouraging every buyer to purchase owner's title insurance is part of that mission. It's about protecting your investment and your family's future.

For more information about title insurance and protecting your property rights, visit the American Land Title Association at www.homeclosing101.org.