Protecting Your Home with Title Insurance
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The biggest investment you will make in your lifetime will probably be purchasing a home. So before you close, you need to be sure that that nobody else has a claim to the property.
A title 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 company performs an extensive search on the property's title history. Through its research, the title insurance company can usually find any title problems and have these problems cleared-up prior to closing.
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 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. 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 the 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 complex problems define "Defective title" or "Clouded Title." The title insurance policy will protect you from these errors if the title company doesn't discover them.
Alternative Mortgage Group can answer questions about title insurance and many others. Call us: 561-395-4264.