why do I need title insurance?

If you are obtaining a loan to purchase the property, your lender will require a title opinion or title insurance.  Even without a loan, you should make sure the seller has good title before you purchase so you don’t end up inheriting his or her judgments, tax problems, liens or other title problems that could be fixed at closing.

title insurance vs. title opinions

Your lender may require title insurance, but a title opinion by a licensed lawyer also provides an assurance of good title at a lower cost. For example, if you have a larger loan refinance where title has already been established, a title insurance premium may cost hundreds of dollars more than a title opinion since those rates are always based upon the size of the loan. Title opinions are normally a fixed price no matter how large the loan. In other words, always ask if a title opinion is an option - it may save you money.  Quality Title, unlike most title companies, provides title opinions.

 

lender’s insurance vs. owner’s insurance

If you do require title insurance, make sure to purchase an owner’s policy.  It does cost a little bit more at closing but a lender’s policy does not protect you against title claims.  When buying a lender’s policy, an owner’s policy is quite inexpensive and helps protect your rights.

 

choice of insurance

RESPA requires that a buyer can choose his or her title insurance company.  Make sure you shop around and make your own choice.