Protecting Your Home with Title Insurance

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The biggest investment you will make in your lifetime will likely be purchasing a home. So before you close, you need to know that nobody else can claim the property.

Determining that your rights and interests to the property are clear is the business 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. Through its research, the title insurance company can almost always identify any title problems and have these problems cleared-up prior to closing.

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 the 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 — 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 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 policy will protect you from these errors if the title company doesn't discover them.

At Harbor View Lending* a DBA of Megastar Financial, we answer questions about this process every day. Give us a call at (207) 571-8034.