Title insurance is protection against loss if a defect is found in your title. When you buy a home, you are given title to the property that generally means you receive full legal ownership. But sometimes there’s a hidden mistake in a prior deed, will, mortgage, etc., that may give someone else a valid legal claim against your property.
An Owner’s Title Insurance Policy is your best protection against potential defects that can remain hidden despite the most thorough search of public records. A Lender’s Title Insurance Policy also exists to protect your mortgage lender’s interest. When you buy a home, or any property for that matter, you expect to enjoy certain benefits from ownership. For example, you expect to be able to occupy and use the property as you wish, to be free from debts or obligations not created or agreed to by you, and to be able to freely sell or pledge your property as security for a loan. Title insurance is designed to cover these rights you bargain for.
The required insurance protects the lender up to the amount of the mortgage, but it doesn’t protect your equity in the property. For that you need an owner’s title policy for the full value of the home. In many areas, sellers pay for owner policies as part of their obligation to deliver good title to the buyer.
Coverage typically protects against 4 “hidden risks”
- Errors: Incorrect information in deeds, mortgages, public records, etc., such as a wrong name.
- Liens: Claims against the property or the seller which become the new owner’s responsibility after the sale. Examples are unpaid mortgages, taxes, sewer and water assessments, bills owed to contractors or other creditors, etc.
- Claims to Ownership: For instance, a claim to “marital interest” by the spouse of a former owner or by a child of a former owner who was not mentioned in the former owner’s will.
- Invalid Deeds: For example, transfer by a person who did not actually own the property, or by a previous owner who was not mentally competent.
*These problems may not be discovered in a routine title search.
You will sign all the documents associated with the loan and/or the sale of the property. For a sale the ownership in the property is transferred once the Deed has been recorded at the county’s recorders office and the money has been transferred.
And remember that you will need a picture ID.
The price of title insurance is based on either the sale price or the loan amount. Please call us for a quote.