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TITLE INSURANCE OVERVIEW: When purchasing a home or other real estate, you actually don’t receive the land itself. What you acquire is title to the property with the potential limits asserted by rights and claims of other prior owners. Paying your money and receiving a deed does not assure you of “good” title. Title insurance plays a major role in making certain that your home ownership I free and clear of any rights or claims of prior owners. Problems with title can limit your use and enjoyment of real estate as well as bring financial loss. Title insurance protects you and your mortgage lender from potential risk associated with defects in title. HIDDEN TITLE HAZARD CAN CAUSE UNPLEASANT SURPRSES: In spite of all the expertise and dedication that go into a search and examination, hidden hazards can emerge after completion of a real estate purchase, causing an unpleasant and costly surprise. Some examples include the following. v A forged deed that transfers no title to real estate v Mistakes in the public records v Previously undisclosed heirs with claims against the property v Instruments executed under expired or fabricated power of attorney Owners could lose their homes or equity or delay a home sale without owner’s coverage. Your owner’s policy will protect you! If a claim arises, your title insurance company will defend against its consequences, paying the claim and legal fees to defend your ownership. The purpose if the title search is to disclose land title problems, take appropriate action to clear the record and enable the transaction to be consummated. There may be hidden defects that not even the most diligent search can disclose. Nevertheless, you are protected against these with an owner’s title insurance policy. IT’S IMPORTANT TO KNOW THE DIFFERENCE There are two basic kinds of title insurance: Coverage to the property owner, coverage to the mortgage lender. Only Owner’s Coverage will protect Your Investment. Owner’s Coverage: Lenders Coverage: | Protects the homeowner from potential financial loss. | Insures that the lender has the first and best lien on your property. | | Full coverage that lasts as long as you or your heirs have an interest in the property. | Coverage decreases and eventually disappears as the loan is paid off. | | One premium based on the purchase price. | One premium based upon amount of mortgage. | HOW MUCH DOES TITLE INSURANCE COST? Unlike other kinds of insurance that protect from future occurrences, title insurance protects you from past occurrences. Therefore, rather than annual premiums, you will pay a one-time premium, directly related to the value of your home, at the time of settlement that will insure you against loss arising from defects or hazards that may exist in the title up to the time of your purchase. You should be advised that “Title Charges” in New Jersey are regulated by the New Jersey Department of Banking and Insurance. Special reduced rates may be available where a Title Policy has been issued in the last ten years.
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