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Understanding Title Insurance For Homeownership Process

If you are buying a home for the first time, you may be surprised to learn that you should have title insurance on your new home, even if you've had a title search done on the property.

Title insurance is an important part of the process of homeownership. Unlike other insurance policies, it is a one-time fee paid at the time of closing. If you are looking for the #1 title insurance company in NJ then clear skies title agency is the best option for you.

Understanding Title Insurance For Homeownership Process

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It protects you in any defects in the title of your new property. Lenders purchase their title insurance on your property, and they often require you to do so as well. Even if you are not required by the bank, you still have to buy it.

A title search will reveal any defects in your title, and this defect should be corrected before you close on your home. Your attorney will work with a title search company and then will review and fix any defects that occur in the title.

But the search titles only show what is recorded in the public record. Sometimes there will be a claim on the title you are not part of the public record or claim after carrying false information about your property in the public record.

Title insurance protects you against such problems. This means that the insurance company will protect your investment if these problems occur. They may be fighting the claim in court or return your investment to you if the claim is found to be justified.

Title Insurance Terms To Know

Buying a home is an exciting time for most people, but it can also be confusing and full of foreign terminology. Here we will focus on some of the most common terms used specifically related to the purchase of title insurance. To know more about title insurance terms you can

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Basics: What is Title Insurance?

To begin, let's define the title of the insurance itself. Basically, it is a loss-prevention insurance policy that protects against legal defects in the title that has occurred prior to purchase.

You also cannot buy title insurance just anywhere. You will need to buy your policy from a licensed agent. Often, the bank or your mortgage lender will recommend titles to your insurance agent, but as a buyer, the choice of which company to use is yours.

Other Terms to Know

Escrow is a term with many different meanings. Relating to title insurance, escrow refers to the funds that you give as earnest money when you make a starting bid on the property.

These funds have been placed into a special account by your escrow holder, often a title insurance company, and will be released once all obligations related to the purchase of the property have been met.

Terms of Title Reports

One of the main tasks of the agency heading to Title Search, which is a thorough examination of public records to make sure the property, is legally available for sale. Once this is completed, you will receive the Title Report.