Protecting Your Home with Title Insurance
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Buying a home will likely be the biggest investment you make in your lifetime. So before you close, you need to know that nobody else has a claim to the property.
Determining that your rights and interests to the property are clear is the business of a title insurance company.
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 almost always find any title problems and clear up these problems 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 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. 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". 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 complex problems define "Defective title." The title insurance policy will protect you from these errors if the title company doesn't discover them.
Willow Bend Mortgage can answer questions about title insurance and many others. Give us a call: (256) 734-6012.