Real Estate Title Insurance
All title companies are not created equal. I recommend that you use companies referred by Mortgage Brokers. They are more likely to be up to date on ALL loan type documentation requirements.
Title insurance is the ultimate property protection. In real estate,
"title" means a right to ownership. The title insurance
professional you work with is very important to the sales transaction.
If you have clear title to a house or property, it means that you
own it free and clear. The document stating your right to a property
is also called a title.
Title Insurance Clouds
Various kinds of claims can exist to "cloud" a title. Long lost relatives or heirs could show up with a claim that supersedes yours.
Sometimes fraud is involved such as forgery on recorded documents.
Liens due to foreclosures. (non-payment of loans to the original lender)
Easements (rights to use of the land for other purposes like utilities,
When buying a property, the best way to protect your investment is to obtain the services of a reputable Title Company to do a thorough title search, and insure you against the chance of some lien being overlooked.
Seller's Title Insurance
Some states, it is general practice in a real estate transaction for the "Seller" to purchase the title insurance policy covering the new owner. The understanding is that the seller is proving to the new buyer that the property has clear and marketable title. The buyer receives an owner's title policy from the title insurance company at the close of escrow to insure his interests.
Lender's Title Insurance
The buyer is generally required by the lender to provide an additional policy of title insurance covering the lender's interest in the property for the amount of the loan he is taking out on the property. This is generally paid for by the new buyer and provided to the lender at the close of escrow.
In the unlikely event that an unforeseen claim to a title shows up, your title insurance policy reimburses you for all losses covered by your policy, and may also provide legal support to defend your rights.
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