Details Regarding the Title Insurance Policy
Details Regarding the Title Insurance Policy
Title insurance sounds really complicated, doesn't it? It is something you rarely hear about until you are ready to buy or sell a home or property. However, title insurance is very important and just may save you some hassles and headaches down the road.
So, what is title insurance anyway? It protects you or your bank against issues arising out of mistakes in a property's title. This is something you'll need to have when you either buy or sell a home. Let's look at it from the buyer's point of view. Let's pretend for a moment that you buy your first home. You get a loan from the bank, sign some papers and have a home, right? Well, it is not quite as easy as it seems. Today, lenders require that you obtain insurance on the title of the home. Basically, this means that the seller has the right to sell you this home free and clear.
A good example actually happened to me, so I'll tell you the story. I purchased a home that was new- to both me and the world. It was built by an investor who basically purchased land and then hired someone to build houses on that land. My house was being built right as the housing market began to fall a few years ago. The investor who owned my house had several houses that were in the process of being built or even sold.
I found my house, made an offer which was accepted and proceeded to purchase the house by obtaining a loan from my bank. The bank required title insurance to make sure my house was able to be sold by the seller. Why would there be title issues? For one, the seller may not have legal ownership of the home. The house also could be subject to liens for any unpaid bills such as taxes or other bills. Learn about Asteron Life Insurance. Also make sure to visit Buy OnePath Life Insurance.
This is what happened in my case. When I went to file for my homestead exemption, the clerk of court's office told me that there were unpaid liens on my home so I could not file. Basically, that meant that the owner didn't have the right to sell me the house. They had some bills from plumbers and electricians that they failed to pay before selling the house. Those creditors put a lien on the house so that it couldn't be sold until the bills were paid. The job of the title insurance company was to make sure that was not an issue before we closed on the house. Somehow they missed it.
Since I had purchased the title insurance, the title company paid the liens off so that the house was free for me to purchase. They probably went and got the original owners to reimburse them. However, the fees I paid for the title insurance covered me so I did not have to worry with any of that. I was then able to file my homestead exemption with the clerk of court and know that my house was free and clear.
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