Protecting Your Home with Title Insurance
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Buying a home will likely be the biggest investment you make in your lifetime. So before you sign on the dotted line, you want to be certain that the "title" of the property is clear of other claims.
A title company ensures that your new property is free of encumbrances and other legal obstacles.
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 searches the title history of the property. Through its research, the title company can almost always find any title problems and have these problems cleared-up before you close on the property.
Real Estate law is extraordinarily complicated. Title companies make sure that all the T's are crossed and all the I's are dotted so you don't end up with a clouded title and legal problems. Your 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. 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. 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 complicated problems define "Defective title." The title insurance company will uncover these problems, or if 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. Call us: (707) 252-2700.