Title insurance is a type of insurance that protects owners and lenders against any loss or damage to their property that may be experienced due to liens or other title defects. Each title insurance policy will have specific terms, conditions, and exclusions. Title insurance protects the homeowner and/or lender from another person trying to claim an interest or make legal claim against the property.
Am I required to buy title insurance?
If you receive a mortgage loan to purchase your home, the lender will require you to purchase the title insurance. This title insurance policy will assure them that there are no issues with the title to the property. Title insurance is usually taken out for the entire loan amount and it is in effect until the loan is paid off. Once the loan is paid off in full, the policy will no longer cover the property.
How do I get title insurance?
In order to get title insurance, there must be a title search performed. Usually, your real estate attorney will order the title search and choose the title insurance underwriter. A title search will identify if there are any liens on the property or defects to the title. Coverage under the title insurance will last for the entire length of the home loan and once the loan is paid in its entirety, the policy coverage will stop.
What are the fees for title insurance?
An average lender’s policy can cost anywhere from $800 – $1,000. This is a onetime fee paid at closing. An owner’s policy can cost an additional $450 – $600, which is also paid at closing.