Title Insurance Protects Your Investment
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The biggest investment you will make in your life will probably be purchasing a home. So before you commit to the transaction, you must be certain that the "title" of the property is free of other claims.
A title insurance 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.
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 company can usually find any title problems and clear up these problems 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 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 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 complex problems define "Defective title" or "Clouded Title." The title insurance company will find these problems, or if they miss them, protect you from financial loss - up to the amount of the policy.
Hometown Financial Services can walk you through the pitfalls of getting a mortgage. Give us a call at (772) 252-6724.