Protecting Your Home with Title Insurance
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The biggest investment you will make in your life will probably be purchasing a home. So before you close, you need to know that no one else can claim the property.
A title insurance 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 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 searches the property's title history. Through its research, the title insurance company can almost always find any title problems and clear up these problems prior to closing.
Because Real Estate Law is so complex, 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 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 company will defend the title and will cost you nothing.
- 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 complicated problems define "Defective title" or "Clouded Title." The title insurance company will find these problems, or if they miss them, protect you from financial loss - up to the amount of the policy.
Sierra View Financial Corp can walk you through the pitfalls of getting a mortgage. Give us a call: 916-989-6222.