is Title Insurance?
transfer real estate properly, a title search must be performed, and,
in most cases, the title must be found free of anything that could
endanger your right of ownership. Title insurance protects
against the possibility of future loss should your legal rights to
your property be challenged.
are two types of Title Insurance: A lender’s policy and an owner’s
policy. The lender’s policy protects the lender’s interest
in the property for the amount of the mortgage loan. An owner’s
policy protects the home buyer for the purchase price of the property.
Does an Owner’s Policy Cover?
owner’s policy protects your interest in the property against such
hidden hazards as:
in the recording of legal documents
deeds, releases or wills
or missing heirs
by persons of unsound mind
executed under an invalid or expired power of attorney
for unpaid taxes
a one-time premium paid at closing, your title insurer assumes
responsibility for all legal expenses to defend the title to your
property if ever challenged. If the defense is unsuccessful,
you are reimbursed for any reduction in the value of the land.
is a Title Search?
title search is an examination of all available public records on the
property to verify the seller’s right to transfer ownership, and to
discover any potential challenges to the seller’s ownership of the
property. A title search will reveal unpaid taxes, unsatisfied
mortgages, judgments against the seller, and restrictions limiting
the use of the land. However, even the most diligent search may
fail to reveal some hidden threats to the title, such as those
mentioned above that Title Insurance protects against.
Long Does Title Insurance Coverage Last?
lender’s policy lasts until the mortgage is paid in full. An
owner’s policy remains in force as long as you or your heirs have
an interest in the property.