Understanding A Title Search And Title Insurance

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If you are getting ready to buy a new home, one of the things you need to have done before going to closing is a title search. If the lending institution does not demand this be done, be sure to have it done anyway. In addition, you should also buy insurance on the search. Here is a bit of information to help you understand why you need to have a title search done and then buy insurance for it.

What is a Title Search and Insurance for It?

A title search is research on a piece of property that looks to find who legally owns it and has the right to sell it. Title insurance covers you financially if there is some sort of problem with the title after you have bought the property. While it can do nothing to keep you in the house, it will compensate you for all you have paid already and will pay the remainder of the mortgage owed to the lender.

What Can Happen During the Title Search

The search goes back through the history of the property, making sure no long-lost relative has a right to the property. If it was sold after the death of one of the owners, the heirs may have sold it without getting the consent of everyone entitled to it. The person who was left out of the sale has a right to come and make a claim for the property. If it is proven he or she has a right to it, you will have to leave your home. Of course, you will still be responsible for the mortgage if you did not purchase title insurance. It also checks to make sure there are no liens against the property and that the taxes are current. You will not be held responsible for any liens if you make sure that they are paid for either before the closing, or with the closing money. However, if they are not paid, the liens will remain on the property.

Any problems with the legal ownership or any liens can delay closing on the house. Professional title search services are very thorough. They almost always find any problems so you can get things settled quickly. It is very seldom that anything is missed and comes up years after you have bought the property. However, many lending institutions will require that you buy title insurance to protect their financial investment. Losing your home would be bad enough, but to lose all the money you have invested, and still have to pay off the mortgage would be even worse. Contact a business, such as TitleSmart, for more information.