Title insurance is basically a form of indemnity coverage that protects homebuyers and lenders from financial loss sustained from a defect in the title to land or property. Lender’s title insurance is the most common form of title insurance, which the borrower usually purchases in order to protect the lender. On the other hand, some other types of owner’s title insurance are often paid by the seller to shield the buyer’s equity within the property. It’s a common claim filed against one title: back taxes, conflicting wills, and lines. Check out some points mentioned below.
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Understand the Title Insurance
A clean title is essential for a real estate transaction. The title companies should do some research on each title to search for any kind of line or claims against them before they issue it. The title search is a kind of test or examination from public records to confirm and determine the property’s felony possession or legal ownership and discover whether that property has any other claims.
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The Basic Policy Covers Title Insurance
- Ownership by other parties
- Incorrect signatures on the documents which are fraud
- Flawed records
- Restrictive covenants like unrecorded easements
- Judgments or encumbrances against the property.
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Title Insurance Types
As I have mentioned earlier, there are only two types of title insurance, the first one is lender’s title insurance, and the second one is owner’s title insurance. Most of the time, every lender is required to borrow the lender’s title insurance policy to protect the lender from loss.
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Risks of Not Purchasing the Title Insurance
Not having title insurance can put you at risk with a financial burden, so better you avoid that kind of trouble.
Conclusion
With title insurance policy coverage, a buyer will be protected. For the best title insurance policy, you should always consider a New Jersey title insurance company.
