Title Insurance Protects Your Home Investment
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Purchasing a home is probably the single largest investment you will ever make. So before you sign on the dotted line, you must be sure that the "title" of the property is clear of any other claims.
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 insurance company performs an extensive search on the title history of the property. Through its research, the title company can usually find any title problems that may arise and have these problems cleared-up before you close on the property.
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 the limitations on your ownership. It will also cover what the title company is responsible for. 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 your 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. Many other complicated problems define "Defective title" or "Clouded Title." The title insurance company will discover these problems, or should they miss them, protect you from financial loss - up to the amount of the policy.
At Hometown Financial Services, we answer questions about this process every day. Call us: (772) 252-6724.