Title Insurance Protects Your Biggest Investment

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The biggest investment you will make in your life will probably be purchasing a home. Before closing on the house, you'll want to know that no individual or entity has a claim or lien to 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 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 usually identify any title problems that may arise and have these problems cleared-up 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 title insurance 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. In this case, 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". 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 complex problems define "Defective title" or "Clouded Title." The title insurance policy will protect you from these errors if the title company misses them.

At Harbor View Lending* a DBA of Megastar Financial, we answer questions about this process every day. Give us a call: (207) 571-8034.