Title Insurance Protects Your Investment
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The biggest investment you will make in your lifetime will probably be the purchase of a home. So before you sign on the dotted line, you must be sure that the property's title is clear of other claims.
A title insurance company does all the research to insure that a property has clear title. Making sure that a property is clear of all legal encumbrances is the job 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 performs an extensive search on the title history of the property. The title insurance company can usually 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 cover what the title insurance company is responsible for. 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. If this happens, the title insurance company will defend the 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. 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 uncover these title problems, or should they miss them, insure your loss up to the amount of the policy.
At Financial Edge Mortgage Corp., we answer questions about this process every day. Give us a call: 425-508-9988.
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