Protecting Your Home with Title Insurance
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Buying a home may be the largest investment you make in your lifetime. So before you close, you need to know that nobody else can claim the property.
Determining that your rights and interests to the property are clear is the business of a title company.
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 performs an extensive search on the property's title history. Through its research, the title company can usually identify any title problems and have these problems cleared-up prior to closing.
Real Estate law is extraordinarily complex. Title companies make sure that all the T's are crossed and all the I's are dotted so you don't end up with a clouded title and legal problems. 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 covers the following:
- Contested title — This usually happens when someone who owned or even lived in the home before you claims to still hold an interest. If this happens, the title company will defend the 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". 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 Alternative Mortgage Group, we answer questions about this process every day. Give us a call: 561-395-4264.