Types of Title Insurance

Various types of title insurance are the methods by which one can make sure that the property owned by him is having a valid title. Types of title insurance also help to make sure that the property owned is free of liabilities or lien. Before going for types of title insurance, the owner of the property need to make sure that the seller is having a valid title for the property that is being sold and bought by him and such a title owned by the seller is presented accurately. If the title of the seller is not proper there is a chance that the buyer might loss the whole property.

As there are several inaccuracies in title recording title insurance policies have become very much important. There are three types of title insurance policies. One among the various types of title insurance is construction loan insurance which is very rarely used.

Lender’s Title Insurance

Among the various types of title insurance is lenders title insurance issued to lenders of mortgage. This insures the sale of mortgage loan as well. When a sale of loan takes place lenders title insurance makes sure that for the loan on mortgage remains as an asset for the buyer. Mortgage loan will get protection under certain situations under this kind of policy. Such situations are when:

  • Borrower of mortgage loan is not in possession of the title of property due to some defects or due to some liens or because it is not marketable.
  • There is no right for the title holder to access the land
  • There are some other liabilities against the property other than the mortgage lien or because mortgage lien created is invalid

Mortgage loan as well as title is protected against litigation by this kind of insurance. On the basis of negotiation with insurance company by insurer some other exceptions can be included or more situations can be encompassed.

Owner’s Title Insurance

Owner’s title insurance is yet another type of title insurance. These types of title insurance are purchased by the real estate purchaser. This insurance policy helps to make sure that the title purchased is legitimate and is owned by seller. There won’t be any hidden defects or liens over the property. You can sell a property with lien but the only thing is that such liabilities are to be mentioned and will be outside policy coverage.

Construction Title Insurance

Construction title insurance is among various types of title insurance and is somewhat like an owner’s title insurance. But in these types of title insurance there is one difference. In construction title insurance builder who is having the property ownership is the one to insure for any amount that increases incrementally while making property improvements. The builder is insured against loss of land due to lien or improper documentation.

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