Protecting Your Home with Title Insurance
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Buying a home will likely be the biggest investment you make in your life. So before you sign on the dotted line, you want to be sure that the property's title is free of other claims.
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 performs an extensive search on the property's title history. The title insurance company can usually identify any title problems 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 selling 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 company's responsibilities should any claim covered by the policy terms arise. 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 insurance company will defend the title at no expense to you.
- 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 policy will protect you from these errors if the title company doesn't discover them.
At Custom Lending Group, we answer questions about this process every day. Give us a call: (707) 252-2700.