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Title
Insurance
Title
insurance protects against financial loss due to defects in the
title to your property. There are two types of policies --
the lender policy, which protects the lender and its assigns, and
the owner policy, which protects the homeowner and his or her heirs.
When
you purchase property, the mortgage lender requires a title exam
to review the recorded history of the title. However, even
if a title exam shows the seller has good title to the property,
there is still a possibility that there is a hidden problem neither
the seller nor the title examiner is responsible for but which could
affect your title to the property. These hidden defects include
forged deeds, lost deeds, deeds signed by people not legally competent
to sign, incorrectly recorded deeds, or improperly probated wills.
As
part of the agreement to lend you money to purchase your home, your
lender will require you to pay for a lender title insurance policy,
which protects the lender and its assigns from financial loss if
your title to your property is challenged or invalidated.
However, this lender policy does not protect you against such loss.
For your own protection you would need an owner policy.
Each
title policy is paid for with a one-time premium at the time of
the closing. If you elect to purchase an owner policy, there
will be a discount because you are purchasing the lender and the
owner policies together. We will inform you prior to the closing
of the additional cost of an owner policy.
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