How Does Title Insurance Affect a Lender?

Unpaid taxes, liens filed against a property by a contractor, undisclosed claims, or even filing errors or title forgeries – these are all situations that title insurance can help protect against. No matter how careful a buyer or a seller may attempt or have the intentions to be, there can be frustrating, complicated or even unknown circumstances that reveal themselves through the process of purchasing a property.

In the best effort to thoroughly and legally guard against any of these unpleasant events, title insurance can come to the rescue. The title company completes a check of public records to ensure that the title is “clean,” as in free and clear of any issues, and should any concerns arise or a claim is attempted after the purchase, title insurance provides protection against potential liability.

How Does Title Insurance Affect a Lender?

Extra insurance sounds like a great idea, especially when it’s for something as significant as a real estate transaction, right?! But who is responsible for paying for title insurance? Like with many other aspects of the property buying and selling process, it depends. Let’s take a look at a few scenarios?

• Buyer
  Buyers will often be required by their lender to pay for title insurance as part of the closing process and associated costs. This type of lender’s coverage focuses on protections for your lending institution. Buyer’s can also purchase additional coverage that’s known as an owner’s policy.
  
• Seller
  As part of the negotiation process for the home, buyers can request that the sellers cover the cost of title insurance.
  
• Builder
  Sometimes for new construction properties, a builder or developer will offer to cover the cost of title insurance as an incentive for buyers.
  

Additionally, who pays for title insurance can depend on where you live or where the property is located and may be dictated by the state or county.

Regardless of who pays for the title insurance in the transaction though, it is intended to cover the costs of rectifying any issues that may arise with the title. For example, if an issue with the title should arise, title insurance provides protection and covers costs if the issue goes to court or claims must be paid as a result.

Though it can sound daunting, sometimes these situations can occur without malicious intent, as it may simply be a matter of lost or misfiled documentation. Very often concerns with property titles can be reasonably rectified and to some degree are actually fairly common, but title insurance helps provide necessary protection nonetheless.

Stay Protected with Title Insurance

Home buying and ownership can come with many ups and downs and twists and turns. Among the many ways buyers can arm themselves with protection and fail-safes in the process is through title insurance. Learn more about title insurance and how we can help bring you peace of mind at Express Title & Closing. We offer services including title insurance, title searches and reports, and our “anytime-anywhere” closing policy commitment to customers. Contact us today or call 423-434-9200 to learn more now.