Protecting Your Home with Title Insurance
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Purchasing a home is likely the single largest investment you will ever make. So before you close, you need to be sure that that nobody else has a claim to the property.
A title company ensures that your new property doesn't carry encumbrances and other legal obstacles.
You pay the title company a single premium which includes the cost of verifying clear title and covers you in case some fault is later discovered in the title.
The title company searches the title history of the property. Through its research, the title insurance company can almost always find any title problems that may arise and have these problems cleared-up before you close on the property.
Because Real Estate Law is so complex, 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 selling 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. Typically your title insurance will protect you in the following cases:
- 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 complicated problems define "Defective title" or "Clouded Title." The title insurance company will discover these problems, or should they miss them, insure your loss up to the amount of the policy.
Tenby J. Dahman can walk you through the pitfalls of getting a mortgage. Give us a call at 3038627760.