Protecting Your Home with Title Insurance
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The biggest investment you will make in your life will likely be the purchase of a home. Before you close, you'll want to know that no individual or entity has a claim or lien to the property.
A title insurance company ensures that your new home doesn't carry expensive encumbrances and other legal obstacles.
For a modest, one-time title insurance premium, you will receive continuous title insurance protection equal to the purchase price of the property or its current market value.
The title company searches the title history of the property. The title company can usually find any title problems and clear up these problems before you close on the property.
Because Real Estate Law is so complicated, you need an expert to make sure that all previous transactions have been correct, so you don't end up with legal problems or a problem with the title to your property. Your title insurance owner's policy will describe the property and outline the limitations on your ownership. It will also cover what the title company is responsible for. Title insurance usually covers:
- Contested title — This usually happens when someone who owned or even lived in the home before you claims to still hold an interest. In this case, the title insurance company will defend your title at no expense to you.
- Defective title — This is a general term for a legal problem with the title that cannot be corrected and includes "contested title" above. Other examples of title defects include problems with legal access to the property, easements that make the property less usable, unusable, or unsaleable. Any number of other complex problems define "Defective title." The title insurance policy will protect you from these errors if the title company doesn't discover them.
At Tenby J. Dahman, we answer questions about this process every day. Give us a call at (303) 862-7760.