Buying a home is a lifelong dream. A lot of factors have to be considered while buying a new property for oneself. One of those determining factors is safety. You can’t risk someone else standing at your doorstep claiming their rights on your home. To ensure that your property stays with you without any issues, title insurance is necessary.
However, a lot of people are not aware of professional title insurance. If you are one of them, you are in the right place. In this article, we will be telling you the 5 things you should know about title insurance and why it’s important for your property.
What is Title Insurance?
A title is a legal document that includes complete information about the property you are purchasing. From the information of the owner to past owners or liens, it is a document in the form of a deed which protects your rights.
You must have a title search before putting your money on any property. A lot of first time home buyers are unaware of the process.
A title search is usually carried out to make sure that the title of the property is clear and no surprises are waiting for you. While most of the home purchases do not involve issues, some might land you into unnecessary hassles. No matter how big or small a problem is, you need to know about resolving it.
Things You Should Know About Title Insurance
Purchasing a Title Insurance
Once you decide to buy a house, you should instantly look for a professional title insurance company. A title insurance company will provide you two types of policies;
- Owner’s title insurance- which protects the rights of the buyer
- Lender’s title insurance- which protects the rights of the lender
The policy of an owner provides full coverage equal to the amount you are paying for the property. It protects the rights of the owner if any problem is discovered while or after buying a property or after the search is completed.
The insurance is a legal document that implies that you will be getting legal assistance to pay valid claims. Once you pay at the closing, the policy will safeguard you as long as you own the home.
The title search will involve little involvement from your side. The company will conduct a thorough search and provide you with the details you should be knowing. Although it doesn’t take your involvement, you should still know the entire process for your peace of mind.
Prior Claim to the Title
The title insurance company appoints a title investigator who looks for claims to the title that might affect your purchase. The search includes every little detail from public records to other land records. To your facts, about one-third of all title searches unravel some kind of problem.
The most common issues involve the previous owner not paying the state or local tax, the contractor not being paid even after completing the work, forgery, mistakes or omissions in deeds, undisclosed owners or disputed heirs or complicated wills, and so forth.
Having a clear look at such problems, in the beginning, protects you from getting into bigger troubles. With a title search, you can legally take action against the wrong-doings.
Resolving Issues with the Title
Upon title search, if it is found that the seller of the home is sharing ownership of the property with another party, all of the owners must sign the closing document before the sale is completed. Prior taxes or judgments should be paid or made clear at the closing before a title is received. In this case, the seller is given complete rights to resolve any issue with the title.
Furthermore, a title search also includes information about easements, restrictions, and rights of way that could restrict your use of the property. Make sure to go through these documents keenly to understand its impact on your purchase.
Once you are satisfied and own the house, keep your title documents in a safe place.
What Happens to Title When You Sell
Similar to your property buying, your title ownership is transferred to the buyer. The buying party receives a copy of the new title a few weeks after closing showing them that they are now the new owners of the property. Moreover, you no longer have any claim on it. The title you held is deemed invalid.
What If You Lose Your Title?
There’s no reason to fret. Although you should keep your title safe, you can still retrieve a copy from the county country house where the property is located.
A title search is important especially for a first-time home. It safeguards you from further consequences. If you are thinking of hiring a title insurance company, get in touch with a reliable title insurance company. With their years of experience in the domain, they can help you get your title cleared and make sure you own your property happily.