Title Insurance Protects Your Investment
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Buying a home may be the largest investment you make in your lifetime. So before you close, you need to be sure that that nobody else can claim the property.
A title company ensures that your new property doesn't carry 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. The title insurance 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 with the title to your property. Your title insurance owner's policy will describe the property and outline any recorded limitations on your ownership. It will also cover what the title company is responsible for. Typically your title insurance will protect you in the following cases:
- 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 insurance 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. Any number of other complicated problems define "Defective title." The title insurance company will find these title problems, or should they miss them, protect you from financial loss - up to the amount of the policy.
Custom Lending Group can answer questions about title insurance and many others. Give us a call at (707) 252-2700.