Protecting Your Home with Title Insurance
At Liberty Mortgage, we answer questions about this process every day. Call us: 281-542-7392.
Buying a home may be the biggest investment you make in your life. Before closing on the house, you'll want to know that no other individual or entity has a lien or claim to the property.
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 searches the title history of the property. Through its research, the title insurance company can almost always find any title problems that may arise and clear up these problems prior to closing.
Because Real Estate Law is so complicated, 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 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. Title insurance usually covers:
- Contested title — Someone, usually a previous owner or occupant, claims they still own the property or have not given up their claim. If this happens, the title insurance 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. Other examples of title defects include problems with legal access to the property, easements that make the property less usable, unusable, or unsaleable. Many other complex problems define "Defective title." The title insurance policy will protect you from these errors if the title company doesn't discover them.
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