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Do you know what title insurance is? It is an insurance policy that is taken out when real estate is purchased. The policy insures the homeowner against any defects to the title of the property. Its purpose is to protect the party in question from any omissions or mistakes in relation to the property. It also protects you against any fraudulent dealings related to deeds, liens, or mortgages. It can be thought of as an insurance policy and a statement of disclosure. If there are any current problems with the title, or if there are worries that any future ones may arise, an insurance policy is a good thing to have. There are generally two kinds of title insurance policies - a lender's policy and an owner's policy. The beneficiary for a lender's policy is the financial institution. The policy protects the lender's interests and acts as security for the home loan. In this case, the buyer will pay a premium as a part of the mortgage or as a closing cost. When it comes to the owner's policy, it is the buyer who is the beneficiary, not the bank. This policy protects the buyer as long as the interest in the real estate is there. In the most instances, this kind of title insurance policy is optional. If it is stated in the contract, the seller may be permitted to have this instead of providing a Real Property Report. This report defines the improvements that have been made to the piece of real estate. There can be various types of defects found in the title. Examples of these defects include tax liens, judgement liens, bankruptcy proceedings, probate proceedings, deeds that were not transferable, and liens for improvements or repairs. All real estate purchases include an abstract that lists items that in one way or another, affect the title for the property. This historical compilation of information may go back as far as 100 years or more. There may be only a few items listed, or dozens. The insurer will look over the abstract carefully, making note of every detail. After reviewing everything in it, the individual will determine whether the land has been transferred in an appropriate manner in the past. It is also the insurer's responsibility to discover whether there is anyone included in the abstract that would legally have the right to make a claim to the title's property. As is common with other types of policies, the coverage afforded by title insurance will list exclusions and exceptions. These will be defects that have been discovered after a thorough examination is conducted. The items will not be fixed by the carrier but will be listed as exceptions to the coverage that is offered to the policy holder. Generally speaking, the mortgage lender will deem it a requirement that the defects be corrected before the home loan is granted. Do you know about title insurance? Michigan residents rely on: http://www.libertytitle.com.
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