Title Insurance Protects Your Home Investment
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Buying a home may be the biggest investment you make in your lifetime. So before you close, you need to know that no one else has a claim to 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 searches the property's title history. The title insurance company can almost always identify any title problems and clear up these problems prior to closing.
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 any recorded 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. If this happens, the title insurance company will defend your 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 complicated problems define "Defective title" or "Clouded Title." The title insurance policy will protect you from these errors if the title company misses them.
At Alternative Mortgage Group, we answer questions about this process every day. Give us a call at 561-395-4264.