Buying a home is an exciting milestone, but it's also one of the biggest financial investments you’ll ever make. With that in mind, it’s important that as a new homeowner you are prepared and protected should any unexpected issues arise. An important step many buyers should consider is purchasing title insurance before their home closes.

What is title insurance?

A title insurance policy protects homeowners and lenders against any issues related to the title or ownership of a commercial or residential property. It provides coverage for any title-related risks associated with real estate transactions and guarantees the buyer’s legal safety against any errors or fraudulent activity. This can include:

  • Title fraud caused by forged documents from someone trying to take your title
  • Previous owner failing to properly discharge themselves from the title
  • Existing liens on the property
  • Zoning and bylaw violations
  • Claims from builders, contractors and tradesmen
  • Unpaid property taxes from the previous owner

Title insurance also ensures that no other mortgages can be registered without permission from a lawyer and the financial institution that holds the mortgage itself.

How long does it last?

Title insurance coverage lasts as long as you own the property. Most policies extend coverage to your heirs through a will, to a spouse in the event of a divorce or to children when the property is transferred from their parents.

How do you get title insurance?

You can purchase title insurance through your lawyer or by contacting your insurance company. Some of the top licensed providers in Canada include:

  • First Canadian Title (FCT) Insurance Company Ltd.
  • Stewart Title Guaranty Company
  • Chicago Title Insurance Company
  • Lawyers’ Professional Indemnity Company (LawPro)
  • Travelers Insurance Company of Canada

Title insurance isn’t mandatory

While it’s not mandatory, many lenders encourage home buyers to purchase title insurance before their home closes. Given that this is a large financial investment, this extra layer of protection never hurts.

It’s a closing cost

Title insurance is typically categorized as a closing cost and has a one-time premium of roughly $200 to $300, which depends on the policy, the type of property and it’s value.

At Homewise, our goal is to set you up for success at every step of the home buying and mortgage process and that includes accounting for additional, unexpected costs. Apply online in just 5 minutes and one of our dedicated Mortgage Advisors will help you get started on the right foot.