Whether you go on your own or with the help of a real estate agent, buying a house brings with it the list of “dreaded” closing costs. Buying a house is one of the biggest, if not the biggest, investment you’ll make in your lifetime. By the time you’re looking at the closing costs, it can feel overwhelming.
Here at Frank B. Pallotta Law, we get a lot of questions about the closing costs. Some come up more often than others, especially about Lender’s Title Insurance.
Lender’s Title Insurance
There are two types of title insurances that will show up as you close on your new home: Lender’s and Owner’s title insurance. Lender’s title insurance is an insurance fee you pay on behalf of your mortgage lender. It protects their interests in the event that an issue arises with the Title of your new home.
Who does Lender’s Title Insurance cover?
Lender’s title insurance covers your mortgage holder; not you, the owner. It serves to protect the mortgage holder from any financial damages that could occur from a “cloudy” or “dirty” title being sold to you.
If the Title on the home is not clear, it can cause quite a few problems in the purchasing process. And, for the most part, resolving the title issues will fall on the seller and should be sorted out before you get to the closing portion. The insurance is just in case something goes wrong…
Common problems include:
- Conflicting wills, missing heirs
- Separations and divorces that complicate ownership of the home
- Liens/Levies from taxes, unpaid utilities, etc.
- Poor surveying of the property lines
All of these problems would ideally be resolved before ownership of the home is transferred to you, or at least before you get a mortgage on that Title.
What Title Insurance is for the Owner?
Title insurance for the owner is called Owner’s Title Insurance. It’s an entirely separate type of insurance and will be a different item on the closing list. Unlike Lender’s title insurance, Owner’s is technically optional, but still highly recommended to have.
What happens if you don’t get Lender’s Title Insurance?
Most often trying to avoid getting lender’s title insurance will simply result in your mortgage being denied, cancelled, or rejected outright.
How do I get Lender’s Title Insurance?
Usually your mortgage holder will have a preferred insurance provider. One of the many services we provide at Frank B. Pallotta Law is Title Examination and Title Insurance. How much lender’s title insurance will cost will vary depending on the policy your mortgage lender is requiring and the value of the home. A title insurance premium rate calculator is available here or a quote can be obtained by calling our office at 770-924-1400.
What if I have any more questions?
Give us a call! Frank B. Pallotta Law is a licensed Real Estate Lawyer in Cherokee County, Georgia with 20 years of experience helping our clients navigate the closing process. Reach out to us with your questions. We’re here to help!