Protecting Your Home with Title Insurance
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Buying a home will likely be the largest investment you make in your life. Before you close, you will want to know that no individual or entity has a right, claim or lien to the property.
Determining that your rights and interests to the property are clear is the business of a title company.
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 insurance company searches the title history of the property. Through its research, the title 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 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 selling your property. Your owner's policy will describe the property and outline any recorded limitations on your ownership. It will also set forth the title company's responsibilities should any claim covered by the policy terms arise. Title insurance usually covers:
- Contested title — Someone, usually a previous owner or occupant, claims they still own the property or have not given up their claim. In this case, the title company will defend the title and will cost you nothing.
- Defective title — This is a general term for a legal problem with the title that cannot be corrected and includes "contested title" above. Defects are rare, but they can be very difficult, making the property inaccessible, unbuildable, or unsaleable. Many other complex problems define "Defective title." The title insurance policy will protect you from these errors if the title company misses them.
Alternative Mortgage Group can answer questions about title insurance and many others. Call us at 561-395-4264.