Protecting Your Home with Title Insurance

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The biggest investment you will make in your lifetime will probably be purchasing a home. So before you sign on the dotted line, you must be certain that the property's title is free of other claims.

A title insurance 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 company.

For a modest, one-time title insurance premium, you will receive continuous title insurance protection equal to the purchase price of the property or its current market value.

The title company performs an extensive search on the property's title history. Through its research, the title company can usually find any title problems and have these problems cleared-up prior to closing.

Because Real Estate Law is so complicated, you need an expert to make sure that all previous transactions have been correct, so you don't end up with legal problems or a problem selling your property. Your title insurance owner's policy will describe the property and outline any recorded 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. In this case, the title insurance company will defend your title and will cost you nothing.
  • 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 complex problems define "Defective title" or "Clouded Title." The title company will uncover these problems, or should they miss them, insure your loss up to the amount of the policy.

Colorado Mortgage Company can walk you through the pitfalls of getting a mortgage. Give us a call: 719-357-6601.

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