Protecting Your Home with Title Insurance
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Buying a home will likely be the largest investment you make in your lifetime. So before you sign on the dotted line, you must be sure that the property's title is free of any other claims.
A title 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.
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 performs an extensive search on the title history of the property. Through its research, the title company can almost always find any title problems that may arise 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 owner's policy will describe the property and outline the limitations on your ownership. It will also cover what the title company is responsible for. 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 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" or "Clouded 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.
Saab Mortgage can walk you through the pitfalls of getting a mortgage. Call us at 703-288-0777.
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