Who Actually Pays For Title Insurance?


Investing in title insurance is important for a variety of reasons!

In any mortgage transaction, you need to have title insurance. In fact, lenders require that buyers purchase a title insurance policy before dishing out any loan money. As a result, new home buyers may find themselves overwhelmed with all the new technical jargon thrown at them when it comes to title insurance and mortgage lenders. Here is a simple guide for all new home buyers to follow when it comes to understanding who ends up typically paying for title insurance and how it affects a home buyer.

Title Insurance In Purchase Transactions

Typically, first-time homebuyers will become very familiar with title insurance. There are two types: an owner’s policy and a lender’s policy. A lender’s policy is required for all mortgage transactions, however, an owner’s policy is not required but often highly recommended.The reason an owner’s policy is so important is because just as it sounds, it protects the homeowner from any problems that may arise with the title to the property. In fact, there are many times where a title or deed to a property is incorrectly designated which can result in a variety of issues leaving you without legal ownership of property you purchased. Therefore, it is critical to protecting yourself from such horrific situations by investing in an owner’s policy when you purchase your title insurance policy.

Refinance Transactions

Another common time that homeowners will deal with title insurance is in any refinance transaction. However, during a refinance transaction the homeowner only needs to purchase a lender’s policy because the owner’s policy of title insurance covers the homeowner for the entire time that they own the purchased property. As a result, the homeowner will typically be the sole person to purchase the mortgage policy when undergoing a refinance of their property.

A Title Company You Can Trust: Colony Title

At Colony Title, we will help you through the process of getting your property’s title and help you avoid the pitfalls of hidden costs while you buy your home. We are also well trained in identifying any and all errors in public records and helping you resolve them. We specialize in real estate title insurance in both Maryland and Washington, D.C., and we will perform an expert title search, check through all past documentation, and examine records for any fraud or forgery. For more information on how we can get you into the home of your dreams, contact us online or give us a call at (410) 884-1160. To get more updates on housing markets and how to get into your home, follow us on Facebook, Twitter, LinkedIn, and Google+.

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