Your lender must insure that the quality of the title to the property you are about to buy, and which you will pledge as security for the loan, is satisfactory.
The Lender does this by obtaining a Lender’s Policy of title insurance, often referred to as the ALTA Loan Policy.
The Lender’s policy protects the Lender against loss due to unknown Title defects at the time of the sale and in the future. This policy only protects the Lender’s interest. It does not protect you.
That’s why you need an Owner’s Policy, which will be issued at the same time as the Lender’s policy for a one-time fee.
Here are just a few of the most common hidden risks that can cause a Title issue:
• False impersonation of the true owner of the property
• Forged deeds, releases of wills
• Undisclosed or missing heirs
• Mistakes in recording legal documents
• Deeds by persons of unsound mind
• Deeds by minors
• Deeds by persons supposedly single, but in fact married
• Liens for unpaid inheritance, income of gift taxes
• Fraud
Title Insurance may pay for defending against lawsuits attacking your Title as insured, and may clear up Title problems or pay the losses.
Your Title Insurance protects against title loss and hidden risks as long as the Policy remains in effect.
The team at Smart Start Homeowners are experts with first time home buyers in Colorodo. We are with you every step of the way. Find out more now.
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