Definition
A title is a legal document that proves ownership of a property. It shows a complete history of the home, including all past owners and any liens.
Importance of a Title in Mortgages
During the mortgage closing process, the title shows who legally owns the property. Title companies check for any claims or liens that might affect ownership. This ensures the buyer gets a clear title. Example: If a home is sold for $200,000, the title must reflect the buyer's name after closing. It's not just a piece of paper; it legally protects your ownership rights. One common misconception is that having a title means you own the property free and clear. It doesn't guarantee freedom from future claims unless there's proper title insurance.
