Protecting Your Home with Title Insurance

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The biggest investment you will make in your life will likely be the purchase of a home. So before you close, you need to be sure that that nobody else can claim the property.

A title company does all the research to insure that a property has clear title. Making sure that a property is clear of all legal encumbrances is the job of a title insurance company.

You pay the title insurance company a single premium which includes the cost of verifying clear title and covers you in case some fault is later discovered in the title.

The title company performs an extensive search on the title history of the property. The title insurance company can almost always find any title problems and have these problems cleared-up before you close on the property.

Real Estate law is extraordinarily complicated. Title companies make sure that all the T's are crossed and all the I's are dotted so you don't end up with a clouded title and legal problems. Your owner's policy will describe the property and outline the limitations on your ownership. It will also cover what the title insurance company is responsible for. Title insurance usually covers:

  • Contested title — Someone, usually a previous owner or occupant, claims they still own the property or have not given up their claim. If this happens, the title company will defend your title at no expense to you.
  • Defective title — "Defective title" covers any number of problems with the title to your home. It can even include a "contested title". Defects are rare, but they can be very difficult, making the property inaccessible, unbuildable, or unsaleable. Any number of other complicated problems define "Defective title." The title insurance policy will protect you from these errors if the title company misses them.

Southwest Funding #841 can walk you through the pitfalls of getting a mortgage. Give us a call at (512) 291-6100.

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