Protecting Your Home with Title Insurance
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Purchasing a home is likely the largest investment you will make in your lifetime. Before closing on the house, you'll want to know that no individual or entity has a right, lien or claim to the property.
A title insurance company ensures that your new home won't surprise you with expensive encumbrances and other legal obstacles.
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 insurance company can almost always 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 selling your property. Your owner's policy will describe the property and outline the 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 usually covers:
- Contested title — Someone, usually a previous owner or occupant, claims they still own the property or have not given up their claim. In this case, the title company will defend your 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". Defects are rare, but they can be very difficult, making the property inaccessible, unbuildable, or unsaleable. Any number of other complex problems define "Defective title." The title insurance company will uncover these problems, or should they miss them, insure your loss up to the amount of the policy.
At Hometown Financial Services, we answer questions about this process every day. Give us a call: (772) 252-6724.