Title insurance is one of the elements of purchasing or refinancing a home that is often confusing to buyers and homeowners. “Title” is the legal right to the possession of property.
Tile insurance is required by the lender. It protects the lender against issues that may not show up on the land records, but which may present themselves down the road. Buyers and homeowners may purchase an owner’s policy which protects the homeowner from these same issues. For example, there may be unpaid tax liens on the property which could potentially cause a homeowner some difficulties without a title insurance policy in place.
If you are refinancing your home, the lender will require a new lender’s title policy. Even if you refinance with the same lender, the existing policy terminates with the payoff of that mortgage. In addition, the lender wants to be protected from title issues that may have arisen since you purchased the property. In this situation, you may receive a discount on the cost of the title insurance policy, but be sure to ask.
