You recently bought your lovely home and have invested substantially into it, perhaps remodeling the kitchen. One day, a woman knocks on your door and says that she and her husband had split up shortly before he put the house on the market, and that he forged her name on the deed. She says the sale was invalid and that she's still the owner—and she wants you out. You and the woman go to court where she proves that her story is true. She gets the house back, and you are evicted. Meanwhile, the husband has vanished with the money from the sale.
When you purchase a home, typically you will be given a choice to buy either a LENDER policy or a HOMEOWNER policy. The lender’s policy is attached to the mortgage so if you refinance, you will have to furnish them with another one. The Homeowner’s policy is attached to the property and as long as you own that home you will never need another one. In other words, if you purchased a homeowner’s title insurance policy when you bought the house, you do not have to buy a lender’s policy when you refinance.
My opinion, it is a necessary evil. Some claim it is a huge waste of money because the incidence of claim is so low and because there have been investigations into title insurance companies giving kickbacks to lenders. If you live in Iowa they have established their own title guarantee program, citing high costs. The difference in cost between a lender’s and homeowner policy is typically less than $100 and the total amount can be rolled into closing costs.
Not having it can cost you everything if you are one of the unlucky ones.
When you purchase a home, typically you will be given a choice to buy either a LENDER policy or a HOMEOWNER policy. The lender’s policy is attached to the mortgage so if you refinance, you will have to furnish them with another one. The Homeowner’s policy is attached to the property and as long as you own that home you will never need another one. In other words, if you purchased a homeowner’s title insurance policy when you bought the house, you do not have to buy a lender’s policy when you refinance.
My opinion, it is a necessary evil. Some claim it is a huge waste of money because the incidence of claim is so low and because there have been investigations into title insurance companies giving kickbacks to lenders. If you live in Iowa they have established their own title guarantee program, citing high costs. The difference in cost between a lender’s and homeowner policy is typically less than $100 and the total amount can be rolled into closing costs.
Not having it can cost you everything if you are one of the unlucky ones.