Title Insurance Protects Your Investment
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Purchasing a home is likely the single biggest investment you will make in your lifetime. Before you close, you'll want to know that no individual or entity has a claim or lien to the property.
A title insurance company ensures that your new property doesn't carry encumbrances and other legal obstacles.
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 searches the property's title history. The title company can almost always find any title problems and clear up these problems 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 — This usually happens when someone who owned or even lived in the home before you claims to still hold an interest. In this case, the title insurance company will defend your title at no expense to you.
- 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" or "Clouded Title." The title insurance company will uncover these problems, or if they miss them, protect you from financial loss - up to the amount of the policy.
At Coastal Mortgage Corp., we answer questions about this process every day. Give us a call: 504-866-5626.
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