Title Insurance

Title insurance is a type of insurance that protects a home owner and mortgage lender from issues that relate to a home’s ownership and title. This type of insurance typically paid for and placed into existence  at the time of closing on a real estate transaction and is applicable for purchase and refinance mortgage transactions. Title insurance is designed to protect both the home owner/home buyer and mortgage lender in a real estate transaction. Title insurance is coverage that allows the mortgage lender to place a lien on the property with the certainty that they have first position in securing their ownership interest in a home.

Title insurance is important to home buyers as it provides them with the peace of mind that there are no additional ownership interests in the home they are purchasing and that the seller is able to convey a clean title to the buyer. It is recommended that home buyers who are paying cash for a home acquire a title insurance policy so they can be certain that the property has no liens for unpaid taxes, contractors or mortgage lenders. This policy requires a onetime premium that is paid at closing.

Home owners who are refinancing their mortgage should expect to pay for a new title insurance policy at closing.  If the home owner is refinancing with their existing mortgage lender or has kept their original title policy it is possible they may receive a reduced premium at closing as the title insurance policy may only require new coverage dating back to their old policy date.

Home owners can shop for a title policy with any title company they choose as a way to help keep their closing fees down. If a lender requires you to only work through their title company then you should consider this when examining their good faith estimate of fees to ensure you are receiving a fair price. A title insurance policy will be in place until you sell or refinance your home.