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Why Homebuyers Need Title Insurance

One of the most important parts of the mortgage process is often one that gets ignored: title insurance.

Title insurance is essential for protecting homeowners and lenders from potential issues with someone showing up and claiming they are the rightful owners of the property. It ensures the buyer has clear ownership, similar to checking a used car's history report before buying the car.

“We actually hire a title company to run out and do thorough public research, like a private investigator, and compile a title report with all the information on the property,” said Kevin Ramirez, senior vice president of sales training at New American Funding.

“We then look at the title report for its completeness and then purchase title insurance from the title company that protects the borrower and lenders interest that if something pops up later,” Ramirez added.

These unforeseen problems could include unknown owners or heirs claiming ownership, undisclosed liens or mortgages on the property that the new owners might have to pay back, errors in public records, and more.

Kevin Ramirez NMLS # 104026