Protecting Your Home with Title Insurance
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Buying a home may 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 any other claims.
Determining that your rights and interests to the property are clear is the business of a title insurance 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 insurance company performs an extensive search on the title history of the property. Through its research, the title insurance company can almost always identify any title problems that may arise and have these problems cleared-up before you close on the property.
Real Estate law is extraordinarily complex. 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 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 complicated problems define "Defective title" or "Clouded Title." The title company will find these problems, or should they miss them, insure your loss up to the amount of the policy.
At Harbor View Lending* a DBA of Megastar Financial, we answer questions about this process every day. Give us a call: (207) 571-8034.