Title insurance is one of the costs that buyers will incur when buying a home with or without a mortgage loan. Mortgage lenders require buyers to get lender title insurance as a condition to making the loan. Lender title insurance protects the lender if any title problem arises post-closing that jeopardizes the lender’s ability to have the loan repaid.
Buyer pays lender’s title insurance premiums at closing. If the buyer wants title insurance to protect the buyer’s property interests, the buyer may purchase it at closing or later; although buying it later generates additional costs.
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types of title insurance and frequency of payments
title insurance for lenders
Lender’s title insurance premiums are paid by the buyer at the time of sale closing. The buyer makes a one-time insurance premium payment at closing, and the lender’s title insurance is effective at the time the title is transferred. Buying title insurance from lenders is different from buying other insurance because title insurance is purchased in one lump sum, unlike other types of insurance most people have where premiums are paid monthly, quarterly, or annually .
Once the buyer has purchased title insurance from the lender, the insurance policy lasts as long as the lender has the mortgage outstanding. If the buyer holds the property until the lender receives full payment, the title insurance will end once the buyer has paid off the loan.
When a property owner refinances a home loan, the property owner will take out a new loan to replace it. Existing lenders’ title policy will terminate at the time the original loan is refinanced. the property owner will need to purchase a new lenders title insurance policy at the time the new loan is closed.
owner’s title insurance
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Lenders title insurance only protects the lender. It does not protect the owner of the property against competing claims of ownership to the property. If someone asserts an interest in the property based on an inheritance claim under a will, or a contractor or taxing authority asserts a valid unpaid lien on the property, the owner will incur the costs of defending against those claims and the owner’s ownership rights could be at risk.
Property owners can protect themselves against these risks by purchasing title insurance. is available to homeowners whether there is an outstanding mortgage on the property or if the homeowner has clear title and is clear of any mortgage loans.
A property owner may purchase homeowner’s title insurance at closing or any time thereafter. the premium is paid in a single payment.
A property owner may purchase title insurance at closing or any time thereafter. Regardless of when the owner purchases a policy, the policy will be effective retroactively from the time the property owner acquired title to the property. Owner’s title insurance is unique in that regard: most other types of insurance only protect you against problems that arise after you purchase the insurance policy.
extended owners policy
Some property owners want more coverage than is available under a basic homeowner’s title insurance policy. In those cases, the property owner may want to consider purchasing an extended homeowner’s policy, which protects the property owner against other types of title problems, such as trespassing or forgery that occur after the policy is issued, along with other issues arising from covenant breaches by a previous owner, claims based on living trusts, and other legal matters that adversely affect the property interests of the owner.
Benefits of Owner’s Title Insurance
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The benefits of purchasing an owner’s title insurance policy are clear.
Most importantly, homeowner’s title insurance protects the owner’s (rather than the lender’s) interest in the property. will cover the owner’s cost of defending against claims and lawsuits by a third party based on claims on the property that arose before the owner purchased the property. the cost of litigation can be significant, while the cost of title insurance is small by comparison.
Also, an owner’s policy lasts for the entire time you own the property. That means if you have owned the property for 30 years and decide to sell it next year, your policy will end when you close on the sale.
If you die while you still own the property, your title policy transfers to your spouse or children. the title policy will remain in effect as long as your spouse or children own the property.
contact mathis title company for more information on title insurance
mathis title company wants to help you with your closing and provide you with the title insurance coverage you need. Mathis Title is a proven Virginia title company with the legal experience to provide great service to its many satisfied clients. their title experts handle many thousands of closings each year and are available to assist you with your closing or any title issues you are facing.
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