What is “Title Insurance” and do I really need it?
A. Title insurance is a safeguard against loss due to unknown title defects on your property. There are two types of policies; one to protect the lender’s interests for the amount of the loan and another for the buyer to protect the down payment amount. The insurance is a protection from the hidden risks that could threaten a title even after the most careful title search. The list of such risks is a long one but includes fraud, false impersonation, forgery, undisclosed or missing heirs, mistakes in recording legal documents as well as misinterpretations of wills and certain deeds that are invalid or have been misrepresented.
Title Insurance protects both you and the mortgage lender against the possibility of any unknown liens or discrepancies regarding ownership of the property. This one time insurance fee is paid at the time of closing and the cost depends on the value of the home and the amount of the mortgage (this insurance is NOT to be confused with CMHC mortgage insurance).
