Protecting Your Home with Title Insurance
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Buying a home will likely be the largest investment you make in your lifetime. Before closing on the house, you will want to know that no individual or entity has a lien or claim to the property.
A title 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.
You pay the title 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 searches the property's title history. The title insurance company can almost always identify any title problems that may arise 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 title insurance owner's policy will describe the property and outline any recorded limitations on your ownership. It will also set forth the title insurance company's responsibilities should any claim covered by the policy terms arise. 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 your 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, unable to be built, or unsaleable. Many other complicated problems define "Defective title" or "Clouded Title." The title insurance policy will protect you from these errors if the title company misses them.
Keypoint Mortgage can answer questions about title insurance and many others. Give us a call: 201-998-9050.
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