Title Insurance Protects Your Home Investment
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The biggest investment you will make in your lifetime will likely be the purchase of a home. So before you commit to the transaction, you want to be certain that the "title" of the property is free of any other claims.
A title insurance company ensures that your new property doesn't carry encumbrances and other legal obstacles.
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 insurance company performs an extensive search on the property's title history. The title company can usually identify any title problems that may arise and have these problems cleared-up prior to closing.
Because Real Estate Law is so complicated, you need an expert to make sure that all previous transactions have been correct, so you don't end up with legal problems or a problem selling your property. Your owner's policy will describe the property and outline any recorded limitations on your ownership. It will also cover what the title insurance company is responsible for. 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. In this case, the title 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." The title insurance company will uncover these title problems, or if they miss them, insure your loss up to the amount of the policy.
F&T Mortgage, Inc. NMLS # 168839 (www.nmlsconsumeraccess.org) can answer questions about title insurance and many others. Call us at 214-300-8756.