When you’re ready to close on a new home, chances are you’re dreaming about dinners in the dining room, cozy nights of relaxation in the living room, family fun in the yard and restful nights in the bedroom. What you may not be thinking about is title insurance—that is, until you realize you need to make a decision about it before closing.
Depending on where you live, and who you borrow from to purchase your new home, title insurance is likely required. Certainly, the majority of lending institutions require a homebuyer to have title insurance to protect their interests in your mortgage, but homeowners are able to select their preferred title insurance company themselves. It may seem like just another expense tacked on to a valuable transaction, but the truth is title insurance is well worth the investment.
So what does title insurance cost? Who pays for it? And, why is it worth the investment? Here are some answers to those pressing questions.
The cost of title insurance varies from state to state and is based on the purchase price of the property. Usually the seller pays for the owner’s title insurance policy (protecting the buyer by proving they have the right to sell the property) and the buyer pays for the lender’s insurance policy (protecting the mortgage lender. In Wisconsin, owner’s title insurance is paid for by the seller. In Minnesota, the party who pays for the owner’s title insurance is negotiable and is sometimes used as a bargaining chip during the negotiation process.
Overall, a title insurance fee is based on the value of the property. To see how much it would cost for your current or desired property, visit rivervalleytitlegroup.com and click on “Get a Quote” for a free instant quote, or call (608) 519-4634 to talk with a title insurance expert at River Valley Title Group.
Why is title insurance worth the investment? Here are a few reasons.
- Title issues arise in more than a third of real estate transactions. Often these title defects are related to liens, unpaid mortgages and errors. Those title problems must be resolved before closing.
- A title insurance premium is a one-time cost, but it protects you as long as you own the property.
- Title insurance protects both property owners and lenders against false claims and fraud, and it insures the title to your investment. Forgeries are easier to create than ever, and fraud is growing in prevalence due to advances in technology. Having title insurance on your side is a must.
- Title insurance companies are experts at conducting research into records and doing an exhaustive title search to protect the title and make sure the transaction is legit. For the average person, this level of research would be extremely time consuming, not to mention difficult and complex. Having a team of experts on your side to ensure you are entering into a legitimate transaction is essential to your peace of mind.
For so many reasons, title insurance is a sound investment—one that will protect a lender throughout the life of the mortgage loan and the buyer throughout their ownership of the property.