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 be sure that that no one else can claim the property.
A title company ensures that your new home 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 company searches the property's title history. Through its research, 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 with the title to 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 company is responsible for. Typically your title insurance will protect you in the following cases:
- 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 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". 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.
At Coastal Mortgage Corp., we answer questions about this process every day. Call us at 504-866-5626.
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