Title Insurance Protects Your Investment
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The biggest investment you will make in your lifetime will probably be purchasing a home. So before you commit to the transaction, you must be sure that the property's title is free of any other claims.
A title insurance company does all the research to insure that a property has clear title. Making sure that a property is clear of all legal encumbrances is the job 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 performs an extensive search on 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 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 with the title to your property. Your owner's policy will describe the property and outline the 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. If this happens, the title insurance company will defend your title and will cost you nothing.
- Defective title — "Defective title" covers any number of problems with the title to your home. It can even include a "contested title". Defects are rare, but they can be very difficult, making the property inaccessible, unbuildable, or unsaleable. Many other complex problems define "Defective title" or "Clouded Title." The title company will find these problems, or if they miss them, insure your loss up to the amount of the policy.
Alternative Mortgage Group can answer questions about title insurance and many others. Give us a call at 561-395-4264.