Protecting Your Home with Title Insurance
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Purchasing a home is likely the largest investment you will ever make. So before you close, you need to know that nobody else can claim the property.
A title insurance company ensures that your new property doesn't carry expensive 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 company performs an extensive search on the title history of the property. The title company can usually 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 covers the following:
- 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 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. Any number of other complicated problems define "Defective title" or "Clouded Title." The title insurance policy will protect you from these errors if the title company doesn't discover them.
Tenby J. Dahman can walk you through the pitfalls of getting a mortgage. Give us a call: (303) 862-7760.