With rates still low, you may be thinking it’s time to buy. When you purchase a home, you need something that proves that you are the true owner of the house. The home title does just that: It gives you rights to the property. The history of the property and the number of people who own the house determine the type of title you can get for your home. When you buy a home, you can purchase title insurance to protect yourself and the lender in case there are any issues with the property’s title.
Types of titles
The way you hold the title to the home depends on how many people own the property. If you are the sole owner, you have a sole ownership home title. You and you alone have the right to live in the house, rent it out or sell it.
There are a few home title options when multiple people own the property. If your home is in Georgia, you have two joint title options, according to the State Bar of Georgia. You and your partner can be tenants in common, which means that if one of you dies, the ownership in the house passes to the deceased person’s estate. The other option is to be joint tenants with right of survivorship. If one of you dies, the other person assumes ownership of that person’s part of the property.
The condition of the home title is another important consideration when you are buying a house. A clear title, also called a marketable title, doesn’t have any legal issues or liens placed on it. As the Cornell Legal Information Institute explains, when the title is clear, you are the distinct owner of the entire property.
A number of factors can impact a title’s marketability. For example, if the person selling the house failed to pay taxes, the government could have a lien on the home, which gives it the right to seize the property.
In most cases, you won’t be able to purchase the home unless the title is clear because another entity may be able to lay claim to the title. When you purchase a home or refinance your mortgage, a title company is usually on hand to ensure the title is clear and to insure it.
There are cases in which a real estate transaction can go through even if the title isn’t squeaky clean. In that case, the title company provides insurance for a title because it’s determined that the risk of the lien holder stepping forward is low. If your property has an insurable title, there’s a problem, but the insurance company has agreed to protect you in case anyone decides to lay claim to the house.
Insurable titles are commonly associated with foreclosure properties. While you shouldn’t face any trouble as the owner of the property, you may have to go the extra mile to clear the title if you decide to sell.
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