What is the function of title insurance in home buying?

The correct choice highlights the primary function of title insurance, which is to protect homebuyers and lenders from potential issues that may arise related to the ownership of a property. When you purchase a property, the title represents your legal ownership. However, there might be unseen problems linked to the title, such as existing liens from unpaid debts, incorrect property descriptions, or disputes over property boundaries and ownership claims.

If any of these issues surface after the purchase, it could jeopardize your ownership rights or result in financial loss. Title insurance provides coverage against these risks, ensuring that if a problem does arise, the insurance will cover the legal expenses and potential financial losses associated with defending your title. This peace of mind is a crucial aspect of home buying, making it essential to have title insurance as part of the purchasing process.

The other choices do not accurately reflect the role of title insurance in the home buying process. For instance, covering mortgage payments during job loss is more related to insurance for income protection, while reducing property taxes and securing lower interest rates relate to financial strategies rather than issues surrounding property title.