Protecting Your Home with Title Insurance
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Buying a home will likely be the biggest investment you make in your life. Before you close, you will want to know that no other individual or entity has a right, lien or claim 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 insurance 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. The title company can usually identify any title problems and have these problems cleared-up before you close on the property.
Real Estate law is extraordinarily complicated. 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 the limitations on your ownership. It will also cover what the title insurance company is responsible for. Title insurance covers the following:
- 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 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. Other examples of title defects include problems with legal access to the property, easements that make the property less usable, unusable, or unsaleable. Many other complex problems define "Defective title" or "Clouded Title." The title company will uncover these title problems, or should they miss them, protect you from financial loss - up to the amount of the policy.
Alternative Mortgage Group can walk you through the pitfalls of getting a mortgage. Call us at 561-395-4264.