Title Insurance Protects Your Home Investment
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Buying a home may be the biggest investment you make in your lifetime. So before you close, you need to know that no one else can claim the property.
A title company ensures that your new property won't surprise you with expensive encumbrances and other legal obstacles.
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 insurance company searches the property's title history. Through its research, the title company can almost always identify any title problems and have these problems cleared-up 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 with the title to your property. Your title insurance owner's policy will describe the property and outline the limitations on your ownership. It will also set forth the title insurance company's responsibilities should any claim covered by the policy terms arise. Typically your title insurance will protect you in the following cases:
- 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 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. Defects are rare, but they can be very difficult, making the property inaccessible, unbuildable, or unsaleable. Any number of other complex problems define "Defective title." The title insurance company will uncover these title problems, or should they miss them, protect you from financial loss - up to the amount of the policy.
At Saab Mortgage, we answer questions about this process every day. Give us a call at 703-288-0777.
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