Title Insurance, Protecting The Owner or The Bank?
There is something you need to know about the required title insurance you have to purchase when you buy a home!
[Brendan] All right, so I'm back here with Joey at Universal Title. You know, one thing a lot of our buyers they kind of run into, they're like okay, so this is what a title company does, but title insurance, is that the same thing as home owners insurance, or like, what is that? I've never heard of it.
[Joey] So title insurance essentially protects a buyers possession in the property. The physical possession and the financial possession. There's two types of title insurance. There's lenders policies and owners policies. Lenders requires buyers, purchase lenders title policy on the lender's behalves, and it's 100% required, every lender is gonna require that a buyer purchase the policy up to the loan amount. It protects the lenders against any means that weren't found in our title search. It's important to note that the lender's policy does not protect the owners at all. The owner's policy, although optional is purchased in more than 99% of transactions, generally speaking it's about .5%, so a half of a percent of the purchase price, it's a one time premium, and it's paid the day of settlement, and owned for the lifetime of the home and it protects the owners against any liens or interest that wasn't found in the title search for whatever reason. Most every one in this community, realtors, lenders, title companies, are already factoring this homeowner's, this owner's policy of title insurance into your closing cost because, again, it's purchased in more than 99% of transactions.
[Brendan] Nice. So, and that's true guys. I know when we meet with all our buyers, when we're factoring our closing costs and like total cost for you to get into the property as well as all the lenders that we work with, we're assuming that you're gonna get the owner's title insurance so I don't want you to think of this as extra money, and this is not an ongoing thing, we just wanted to take a moment to explain this is why you want it, and even though technically it's optional, this is where you get those protections.