Title Insurance = Peace of Mind
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Purchasing a home is likely the largest investment you will make in your lifetime. So before you sign on the dotted line, you must be certain that the property's title is clear of any other claims.
A title insurance company ensures that your new home 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 company searches the property's title history. The title company can usually find any title problems and have these problems cleared-up before you close on the property.
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 cover what the title company is responsible for. Typically your title insurance will protect you in the following cases:
- 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 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. 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.
At Community Trust Lending Team at Norcom Mortgage-NMLS ID#71655, we answer questions about this process every day. Give us a call at (203) 526-9345.