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The Guide on Title Insurance

It’s an insurance policy guaranteeing that title to property is a good title insuring the policyholder against loss or damages from defects in the title.

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The Guide on Title Insurance

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  1. THEGUIDEONTITLE INSURANCE & WHY IT’SIMPORTANT

  2. WHATISTITLE INSURANCE? It’ s an insurance policy guaranteeing that title to property is a good title insuring the policyholder against loss or damages from defects in the title. After reading this article you will understand how to:    Define chain of title    Describe how a title search is conducted    Differentiate between standard title insurance and extended coverage.

  3. Chain of Title Think about the life of a property and how it has had many different owners. Chain of title is a clear and unbroken chronological record of ownership of the property. It allows you to look back and see all previous owners clearly without any gaps or missing pieces. Every owner is linked to a previous owner and the subsequent owners through deeds. Gaps in the chain of title cause uncertainty and can “cloud the title” because ownership of the property may include the risk of someone coming forward and seizing the property from you if they truly own it. If a missing link to the title chain is found, closing should be postponed until the chain is fully restored.

  4. TITLESEARCH When purchasing a property, the buyer expects there to be clear title, also known as marketable title. The title company and/or attorney will do research analyzing the chain of title to ensure there are no gaps. The buyer typically pays for title insurance so that if the title company or attorney makes an error while running the search, the buyer is not at a loss and gets compensated via the insurance policy. As part of the search, the attorney can look at both the grantor index and grantee index. The grantor index starts with the government and works down the chain to the current owner. The grantee index works in reverse, starting with the current owner and working backwards until you get to the government in the chain of title.

  5. Why title insurance is important: Title insurance is important for protecting both the buyer and lender. It doesn’ t cure defects in the title but insures against losses due to title defects. If necessary, the title company will be required to go to court to defend the policyholder (buyer) against any claim against the ownership of the land. Who pays for title insurance: Homeowner’s title insurance is usually paid for by the seller and is a one time premium that gets paid at settlement. The buyer, if borrowing money with a lender, may be required to purchase lender’s title insurance. Sources: http://teamfoy.com/title-insurance-policy-important/ https://artesiantitle.com/

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