What does title insurance mean?
Title insurance is a form of agreement that protects the owner of a property against losses that may arise through any issues in the title to the property owned. So long as the title can be insured, the firm safeguards the property owner against possible loss as a result of any issue in title or costs in the legal defense of the person that is pursuing the title. If you are in search of homes for sale in Chattanooga, getting title insurance is definitely one of the best decisions you can make.
To have a better grasp of what title insurance is, the following instances are situations where a title policy will protect you against defects in the chain of title:
- Fraud: For instance, if an individual falsifies documents and makes them appear like a previous mortgage was paid off when that never happened, the lender could foreclose on the property due to failure to pay for the loan;
- Deeds forged, lost and incorrectly filed;
- Encroachments: For instance, if a neighbor puts their fence on a house that you want to buy, it would lead to a title defect that all parties must settle before you make the purchase of the house;
- Deed by someone that has mental challenges;
- Deed by a person who is a minor;
- Deed from companies that do not have authority under corporate by-laws or made under a falsified corporate resolution;
- Deed by an individual in a foreign country that others can challenge as unauthorized, incompetent or defective under foreign or international laws;
- Deed following a non-judicial foreclosure, where the involved parties failed to observe the normal procedure;
- Deed relating to land in judicial proceedings unauthorized by the court of law;
- Deed from the partnership that the partnership agreement did not authorize;
- Deed from a person that claims to be a trustee, unauthorized under a trust agreement;
- A deed that someone gave under duress or influence; and,
- Deed from or to a supposed corporation before its official incorporation or after the loss of corporate identity.
Types of Title Insurance
There are generally two forms of title insurance. This case applies everywhere, whether you are in Chattanooga or any other city in the country. Similarly, if you work with a good real estate agent in Chattanooga, they will easily guide you as to why both are most likely required or highly suggested.
This type of title insurance safeguards you for the buying price of your home, as well as legal costs, in case a title or ownership matter arises after you purchased your home. An owner’s policy tends to come in place of the amount that you paid for your house and will cover you as long as you own an interest in the property. However, the thing is, it is not a necessity to get this kind of title insurance, but it is a fantastic means to protect your financial interest in the house.
Lender’s policy is the name of the second type of policy. This policy protects only the lender if an ownership or title issue arises after selling the property. This type of title insurance totally contrasts with an owner’s policy in the sense that the amount that would be paid if there was an issue with the title reduces as you pay off the loan and ends once you pay off your mortgage.
Cost of Title Insurance
At this particular point, it will be necessary to talk about how affordable title insurance is. Actually, the cost works in a logical way as it usually and directly relates to the value of the property that the policy covers. A high value means you need more coverage. In addition, the premium is small when you compare it to the total price of purchase. You will also pay it once and it will be applicable in as much as the insured is still the owner of the house.
Similarly, it will continue to serve as protections for the insured on warranties even after they sold the property. Lastly, if you are working with some of the best agents in Chattanooga, they would shed more light on title insurance and how to get one.