Protecting Your Home with Title Insurance

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The biggest investment you will make in your lifetime will probably be purchasing a home. Before you close, you will want to know that no other individual or entity has a right, claim or lien to the property.

A title insurance company ensures that your new property is free of encumbrances and other legal obstacles.

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 property's title history. Through its research, the title insurance company can usually find any title problems and have these problems cleared-up prior to closing.

Because Real Estate Law is so complex, 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 selling your property. Your owner's policy will describe the property and outline the limitations on your ownership. It will also cover what the title insurance 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 company will defend the title and will cost you nothing.
  • Defective title — "Defective title" covers any number of problems with the title to your home. It can even include a "contested title". Other examples of title defects include problems with legal access to the property, easements that make the property less usable, unusable, or unsaleable. Any number of other complicated problems define "Defective title" or "Clouded Title." The title insurance policy will protect you from these errors if the title company misses them.

Capacity Lending, LLC can walk you through the pitfalls of getting a mortgage. Call us at 469-640-0400.

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