Why do you need Title Insurance?
Title Insurance. It's a term we hear and see frequently. We see reference
to it in the Sunday real estate section, in advertisements, in conversations
with real estate brokers. If you've purchased a home before, you're probably
familiar with the benefits and procedures of title insurance. But if this
is your first home, you may wonder, "Why do I need another insurance policy?
It's just one more bill to pay." The answer is simple: The purchase of
a home is most likely one of the most expensive and important purchases
you will ever make. You, and your mortgage lender, want to make sure the
property is indeed yours - lock, stock and barrel - and that no individual
or government entity has any right, lien, claim or encumbrance to your
property.
Title insurance companies are in business to make sure your rights and interests
to the property are clear, that transfer of title takes place efficiently
and correctly and that your interests as a homebuyer are protected to the
maximum degree. Title insurance companies provide services to buyers, sellers,
real estate developers, builders, mortgage lenders and others who have an
interest in real estate transfer. Title companies routinely issue two types
of policies - "owner's," which covers you, the homebuyer; and "lender's,"
which covers the bank, savings and loan or other lending institution over
the life of the loan. Both are issued at the time of purchase for a modest,
one-time premium. Before issuing a policy, however, the title company performs
an extensive search of relevant public records to determine if anyone other
than you has an interest in the property. Once a title policy is issued,
if for some reason any claim which is covered under your title policy is
ever filed against your property, the title company will pay the legal fees
involved in defense of your rights, as well as any covered loss arising
from valid claim.
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