It is, without a doubt, one of the most confusing things I have to explain.

What, you ask? It's Title Insurance! What is it? Why is it required? How come I have to pay for it? How much does it cost? These are a few of the typical questions asked by soon-to-be homeowners.

First of all; it's helpful to remember that "title" is synonymous with "ownership." Another helpful fact to understand is that title insurance - much unlike car, health or life insurances - insures against events that occurred in the past of the home you're about to purchase and the people who owned it.

You take title, or ownership, to your new home at your closing. But what if there are defects - such as another person claiming an ownership interest or improperly recorded documents - lurking in the past? What if, in the past, the home was fraudulently sold? Who really owns the home now? So many questions: One simple solution.

When you buy a home you'll be required to purchase Lender's Title insurance for your lender. Why? Because this cost is shouldered by you as part of acquiring your home financing. You'll also - at the time of closing - be offered the opportunity to purchase Owner's Title Insurance. Both of these insurance policies cover the same risks. A few examples of those are:

oFraud: intentional deception for personal gain

oForgery: executing documents without proper authority

oLien: Simply put: A legal claim against an asset (your home)

oEncroachment: By definition, encroach means to advance. In our case it means to advance over the established property lines.

oEasement: You possess, or have given, permission to rightfully trespass on certain property.

oOwnership Interest: Think of a lost heir

oImproperly recorded documents: What if the legal description was type incorrectly somewhere along the line?

The premium for Title Insurance is a one-time cost, payable at closing as part of your closing costs. As I mentioned before, the Owner's policy is optional. BUT, as a good friend of mine - who has been in the title industry for over 25 years once said - she would NEVER let me buy a home without it. The Owner's policy is usually a couple hundred dollars and IS NOT where you want to cut your costs.

There are fabulous, easy to read, brochures available on this topic. If you'd like more in-depth information on this topic; please give me a jingle or contact a reputable Title Company.