To protect you! It is designed to protect you against
the losses that can occur after closing when it's
discovered that someone else has a claim against the
title to your property. A title search is a close
examination of public records that involve title to
the property you are purchasing, to ascertain that
the "chain of title" has passed correctly
to each new owner, and to insure that no defects in
title to your property exist that may cause problems
for you later. Title examiners typically determine
that all possible liens including prior judgments,
mortgages, back property taxes, or other potential
liens are paid in full before you close the real estate
transaction. However, errors or unanticipated claims
can occur. Title Insurance transfers this risk from
you to the insurer and may reimburse you for any loss
or devaluation of your property as a result of a claim.
There are two types of title insurance, Owner's title
insurance, and Lenders title insurance, which is
also known as a Loan or Mortgage policy. The vast
majority of lenders require a loan policy when they
furnish you with a mortgage loan. They recognize
the importance of good title. Shouldn't you?
Owner's title insurance is most commonly issued for
an amount equal to the purchase price of the property.
The policy lasts as long as you or your heirs have
an interest in the property, and can be purchased
for a one-time fee at closing. Owner's title insurance
protects the buyer should a problem arise with the
title that was not discovered prior to the closing
of your purchase. The policy also pays for any legal
fees incurred in defending a claim to your title.
Loan policies are usually based upon the amount of
your loan and insures that your lender will not have
a title claim that interferes with its mortgage.
Clouds on the Title
If a problem, otherwise known as a "defect"
or "cloud" on the title is found, it should
be corrected before closing. Rights others may hold
can include, but are not limited to: outstanding mortgages,
judgment liens, construction liens, rights of way,
easements, mineral rights, utility easements, possessory
rights (right to rent or occupy), and pending legal
Title insurance is there to protect you from the ever
present potential for human error that could result
in such a cloud interfering with your ownership of
the property. Even expert title examiners can overlook
a defect that can cast a cloud over your title. Title
insurance does not cover defects that arise after
your purchase of the property, and depending on the
type of policy, there may be exclusions for certain
types of title defects such as navigational rights,
mineral rights, liens, easements, and encroachments.
At All City Title Company
any and all exclusions you do not understand will
be thoroughly explained to you before closing.
Considering all that it protects, title insurance
is relatively inexpensive. It is one of the best investments
you can make for your new home or other real estate
property investment, providing you piece of mind and
protection during one of the more important transactions
you will make.
All City Title Company is here
to protect your interests!