Protecting Your Home with Title Insurance
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Purchasing a home is probably the biggest investment you will ever make. Before you close, you will want to know that no other individual or entity has a right, claim or lien 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.
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 insurance 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 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 with the title to 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 insurance company's responsibilities should any claim covered by the policy terms arise. Title insurance usually covers:
- Contested title — This usually happens when someone who owned or even lived in the home before you claims to still hold an interest. In this case, 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. 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 title problems, or if 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. Call us: (772) 252-6724.