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Title insurance is important
because, by providing you with an Owners Policy, they insure that you have
clear title to the property. If there are any problems later, you can always
go back to the title insurance company and have them clear it up. Since
it is customary for the seller to pay for the owner’s policy, they have
an interest in which company is used.
However, you are going
to pay a fee to the title insurance company, too. This is for the Lender’s
Policy. The lender’s policy insures your mortgage lender that there are
no liens or judgments against the property and that the mortgage will be
in first position. In other words, should you sell the property or refinance
it, their mortgage gets paid first, before any other claims against the
property.
The lender’s policy
is less expensive than the owner’s policy.
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