When you buy real estate, the title company will search
the public land records to make sure the seller is the legal owner of the
property. If the title company finds a problem like an incorrect deed or a lien
on the property, it can be fixed before closing. Most people don’t run into
title problems after they buy a home, but it does happen. This is why you
should have title insurance.
1. Types
of Title Insurance. Title insurance falls into one of two categories: lender’s
title insurance and owner’s title insurance. If you get a loan to buy your real
estate, your lender will require a lender’s policy based on the amount of your
loan. An owner’s policy is purchased at closing and lasts as long as you hold
an interest in the property.
2. What
it covers. A basic title insurance policy protects you from any problems with a
title that were not found during the title search. Human error can lead to
mistakes on public records and forged deeds. This can and does happen. Names
and legal descriptions are recorded incorrectly, back taxes may be owed, and
people die without wills specifying their heirs.
3. How
it helps you. Say, for example, that you buy a home with a utility easement in
the backyard, and the title company did not disclose this. You may not be able
to add on to your home or build a swimming pool in your yard because of this
easement. This devalues your property, and the title company will have to
correct this situation for you. In this case, your title insurance will cover
the claim and protect your investment.
Source: www.realtyblogcontent.com |
02/18/14
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