What Is Title Insurance For A Home

< B> What is Title                are looking for any notations in   Insurance?                  the title’s history that would                                     suggest problems in clear          When you sign a contract to           ownership of a property. Any       purchase a home, it usually takes     problems identified in a title     between 30-60 to complete the         are commonly referred to as        transaction. During this time,        “defects” or “cloud on title.”     usually referred to as the escrow                                        or closing period, many                Defects or Clouds on Title     activities occur to secure a loan                                    and to transfer the property from                                        the seller to the buyer.              There are many causes of defects                                         or clouds on title. These defects  What is a Title Search?       or clouds could have occurred                                            with the current owner or with     One of these steps is called a        any previous owner of a property.  title search. A title search is       For example, two owners prior to   conducted to determine who owns a     the current owner, a husband may   property. A property’s title          have sold a home without the       records the history of ownership      permission of his estranged wife.  about a property and identifies       The “wife,” in this example, may   any parties that have an interest     have some claim of ownership to    in a property. A clear title          the property since the property    indicates that the current seller     was sold without her permission.   has full rights to sell the           There may be other problems in a   property,                             title such as forged or missing                                          documents, unpaid taxes, liens,    A title company or their              judgments, or other claims         representative usually conducts a     against ownership to the property  review of a title. These people       not uncovered in the title search  or review of public records.          policy usually covers the expense                                        to remedy the defect (if           In most cases, a title search         possible), or pays the insured     does not reveal any problems with     for any loss due to the defective  a title, and if problems are          title.                             identified, they are resolved                                            before the property changes           If you get a home loan to          hands. However, there are             purchase a property, most lenders  occasions that claims against a       will require that you purchase     property are filed after the new      title insurance for them at your   owner takes ownership of a            expense. This will cover the       property. So this creates a           lender against any claims filed    problem for the new owner and         against the title of a property.   their lender because other            Lenders usually require this       parties are asserting an              coverage. Title Insurance          ownership interest in the newly       companies also offer coverage for  acquired property. This is the        the homebuyer, but this is         type of situation that title          optional and is separate from the  insurance was designed to             coverage required by lenders.      address.                                                                                                        Compare Companies          How is Title Insurance                                               Relevant?                         As with any other form of                                                insurance, different companies     Title Insurance is an insurance       cover different items and charge   policy issued by an insurance         different rates. Be sure you       company to cover beneficiaries if     understand what your policy        there are claims against a title.     covers, since each company will    If defects are found after a          have their list of included and    buyer closes escrow, then a title     excluded coverage items. You       should also know that you might                                          be able to get a lower rate on        A title insurance policy will      title insurance if the current        provide you or your lender         home seller provides you a copy       protection against defects in a    of their title policy. In these       title. There are separate          situations, you may be able to        policies for both the lender and   use the same insurance company        the homebuyer. The lender usually  and request a “reissue rate.”         requires the homebuyer to                                                purchase title insurance for the   Title Insurance Cost          lender and pay the expense. The                                          owner’s coverage is usually        The cost for title insurance is       optional. The title insurance      usually charged as a one-time fee     industry is a competitive          and itemized as part of your          business so it’s best to compare   closing costs. While rates vary       rates and coverage benefits        from company to company, they         between companies. Title           generally range from 0.5% to 1%       insurance is a complex decision,   of the mortgage amount. Be sure       so be sure to talk to your real    to get several bids when              estate agent or attorney before    comparing title insurance.            making any decisions about title                                         insurance.                         Bottom Line                                                   About the Author: San Diego Condos Downtown San Diego Homes Leucadia Condos Read more articles by: Real Estate Pros Article Source: www.iSnare.com