The purchase of a home is typically the largest investment one will ever make. What is title insurance? This assures the proper transfer of ownership. And additionally that the buyer is protected from future claims against the property. Over the years, others may make a claim to a specific property. The current owner’s rights may be unclear, which sometimes involve family members and heirs. In some instances, others, such as the tax assessor, IRS, lenders, or contractors also may have made claims against the property.
Before closing, the title company extensively searches all recorded documents related to the property. After experienced title professionals examine these records, a preliminary title report is prepared. This in-depth examination typically allows enough time to identify any pending issues and correct them as needed before closing.
There are two types of policies. An “owner’s policy” covers the buyer for up to the amount paid for the property. The “lender’s policy” ensures the financial institution over the life of the loan. Both policies are one-time expenses. The cost of the lender’s policy is based on the loan amount, whereas the cost of the owner’s policy is based on the purchase price.
However, over time, most home values increase. The insured amount to the buyer is only up to their purchase price. Click here to learn how that can come into play
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