Why Title Insurance

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The biggest investment you will make in your life will probably be the purchase of a home. Before you close, you’ll want to know that no individual or entity has a claim or lien to the property.

A title company ensures that your new property doesn’t carry expensive 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 insurance company performs an extensive search on the title history of the property. Through its research, the title company can almost always identify any title problems and clear up these problems prior to closing.

Real Estate law is extraordinarily complex. 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 owner’s policy will describe the property and outline any recorded limitations on your ownership. It will also set forth the title 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 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”. 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.” The title insurance company will discover these problems, or if they miss them, protect you from financial loss – up to the amount of the policy.

At All American Home Mortgage, we answer questions about this process every day. Call us at (702) 794-4300.