A home is usually the largest single investment any of us will ever make. When you purchase a home, you will purchase several types of insurance coverage to protect your home and personal property. Homeowner's insurance protects against loss from fire, theft or wind damage. Flood insurance protects against rising water. And a unique coverage known as title insurance protects against hidden title hazards that may threaten your financial investment in your home.

Protecting Your Largest Single Investment

   Title insurance is not as well understood as other types of home insurance, but it is just as important. When purchasing a home, instead of purchasing the actual building or land, you are really purchasing the title to the property -- the right to occupy and use the space. That title may be limited by rights and claims asserted by others, which may limit your use and enjoyment of the property and even bring financial loss. Title insurance protects against these types of title hazards.
   Other types of insurance that protect your home focus on possible future events and charge an annual premium. Title insurance protects against loss from hazards and defects that already exist in the title, and it is purchased with a one-time premium.

Two Kinds of Title Insurance Benefit You in Two Ways

   There are two basic kinds of title insurance: Lender or mortgagee protection, and owner's coverage.
   Most lenders require mortgagee title insurance as security for their investment in real estate, just as they may call for fire insurance and other types of coverage as investor protection. When title insurance is provided, lenders are willing to make mortgage money available in distant locales where they know little about the market.
   Owner's title insurance lasts as long as you, the policyholder -- or your heirs -- has an interest in the insured property. This may even be after you have sold the property.
   Depending on local practices and state law where the property is located, you may pay an additional premium for an owner's policy, or you may pay a simultaneous issue charge (usually a smaller amount) for the separate lender coverage. You may even split settlement costs with the seller for the lender or owner's policy.

What Does Your Premium Really Pay For?

   An important part of title insurance is its emphasis on risk elimination before insuring. This gives you, as the policyholder, the best possible chance for avoiding title claim and loss.
   Title insuring begins with a search of public land records affecting the real estate concerned. An examination is conducted by the title agent or attorney on behalf of its underwriter to determine whether the property is insurable. The examination of evidence from a search is intended to fully report all "material objections" to the title. Frequently, documents that don't clearly transfer title are found in the "chain," or history, that is assembled from the records in a search. Here are some examples of documents that can present concerns:

• Deeds, wills and trusts that contain improper wording or incorrect names
• Outstanding mortgages and judgments, or a lien against the property because the seller has not paid his taxes
• Easements that allow construction of a road or utility line
• Pending legal action against the property that could affect a purchaser, or incorrect notary acknowledgements

   Through the search and the examination, title problems are disclosed so they can be corrected whenever possible. However, even the most careful preventative work cannot locate all hidden title hazards.

Hidden Title Hazards - Your Last Defense

   Despite all the expertise and dedication that go into a title search and examination, hidden hazards can emerge after closing, resulting in unpleasant and costly surprises. Some examples of hazards include:

• A forged signature on the deed, which would mean no transfer of ownership to you
• An unknown heir of a previous owner who is claiming ownership of the property
• Instruments executed under an expired or a fabricated power of attorney
• Mistakes in the public records

   Title insurance offers financial protection against these and other covered title hazards. The title insurer will pay for defending against an attack on title as insured, and will either perfect the title or pay valid claims. All for a one-time charge at closing.
   Your home is your most important investment. Before you go to closing, ask about your title insurance protection, and be sure to protect your home with an owner's title insurance policy.

Immigration restrictions

   By acquiring real estate in a particular country, one does not usually also acquire the right to reside there. While many countries place no restrictions on foreigners who want to buy real estate, immigration restrictions do apply. So even if you own a house in Florida, for example, you would not necessarily be guaranteed access to the United States. Indeed, it could even be deemed, in conjunction with other factors, that you had immigrant intent and you could be denied entry to the United States on such grounds at a future visit. Citizens of certain countries may also face strict visa requirements and consequently suffer restricted travel opportunities and flexibility due to political circumstances. But nationals of Western European countries -- the United States, Canada or Japan, for example, whose passports usually allow them easy access to many countries -- also can suddenly find it impossible to obtain visas due to temporary travel restrictions applied during periods of trade sanctions or other economic or political disturbances.
   Foreigners often can get a 30-year mortgage (home loan) to purchase properties. The only requirement is an approximately 30% down payment. The whole process is very easy and fast. Foreign buyers don't need proof of employment, credit or Social Security number.

Source: Stewart Title company