Where to Buy Title Insurance
Title insurance is an important safeguard when buying a home or other property. It protects against claims by others that they have an interest in the property you are buying. If you are borrowing money, your bank or mortgage company will almost certainly require you to buy it, and you will have the option of getting title insurance to cover your stake in the property.
Title insurance provides payment to the beneficiary in the event of a problem with the title. Thus, if the only title policy is held by your lender, they would get paid -- but not you -- in the event of a problem. Consequently, a similar policy, referred to as an "owner's policy" is also available. Buying title insurance in conjunction with your lender is usually much less expensive (this is because in the early years,
your ownership stake in the property is shared with the lender).
Check several title insurance companies to compare rates. In some states, the rates are set by law, but in others, you will find that they are negotiable. Be sure to compare the services and limitations being offered. If the property has recently changed hands, ask your title company if they offer a "reissue" rate, which should be lower.
Ultimately, the decision to buy title insurance is one of how much risk you are willing to accept. Most home buyers buy title insurance because, while the risks of a problem are extremely low, the results can be financially devastating to the person who paid a lot of money only to find that the seller did not really have a "free and clear" title.
Written November 12, 2003 - go to our home or commerce page