#WhyTitleMatters | Unknown Second Mortgage
- May 9, 2017
- Posted by: TChurch
- Category: Industry News, Title Tips
Imagine going to sell your home only to find out that there is an open second mortgage on the home from the previous owner. You may have never known anything about it or thought was paid off when you originally purchased the home, but the reality is that it is still an open lien on the property and must be paid off. This is exactly why title insurance is a must have when making one of the largest purchases of your life.
Title insurance works much like any other type of insurance that you purchase. It is meant to protect the purchaser from any unforeseen circumstances. One of which would be stumbling upon a second mortgage that was never paid off from the previous owner.
The example above is one that happened with a client of ours recently. The homeowner went to sell her home and ended up finding out that the payoff statement looked like it included both loans, but in reality, it only included one of the loans and the other was still open from the previous owner. Unfortunately, when a situation like this arises, the current owner is now held liable for everything that is associated with the property after the purchase of the home.
Luckily, the owner had title insurance and we were able to correct the situation and they weren’t stuck paying the second mortgage that wasn’t theirs. For someone trying to sell their home, this was a huge benefit and ended up saving them thousands of dollars.
Title insurance is one of those purchases that should be a no-brainer when it comes to closing on your new home. If you have any questions in regards to title insurance, any one of our closers would be happy to help walk you through all of the benefits.
If you’re a buyer, click here for more information on title insurance.
If you’re a realtor, click here for more information on title insurance.