In addition to the homeowner’s insurance policy that covers your property property for damage and liability, you should have title insurance.
In Massachusetts, title insurance is arranged by and purchased from the closing attorney at the time of closing to get the best rate. The cost of title insurance is a one-time charge that is paid a closing.
There are two types of title insurance that a buyer typically pays for when purchasing real estate. Lender’s title insurance is quoted up front by a mortgage lender as part of the closing cost estimate. Some lenders estimate the cost of the owner’s title insurance in their closing cost estimates, others do not.
ABOUT LENDER’S TITLE INSURANCE:
When a mortgage lender loans money to a borrower, the lender requires that borrower to pay for a “lender’s title insurance policy” to protect the lender’s interest in the event that there is a problem with the title to the property that was not discoverable during the attorney’s tile search. Problems that could result in a claim against the property might arise as a result of forged documents from prior sales, claims from heirs of deceased prior owners, fraud, improperly probated wills, faulty legal descriptions, and other issues that can not always be discovered by the attorney’s title search prior to closing.
ABOUT OWNER’S TITLE INSURANCE:
Owner’s title insurance is an optional item for you that is arranged for you by the closing attorney and purchased at closing.
Although it is technically optional, we do not recommend buying property without it. In fact, every attorney that has been our buyer-client has also purchased owner’s title insurance for their own homes, which ought to tell us how important it is.
You can only buy owner’s title insurance in Massachusetts from the closing attorney and buying it at the time you close is less expensive than purchasing it later.
We want to make sure that you know what you are getting and why we highly recommend obtaining owner’s title insurance to protect your interests in the property that you are about to buy.
Over the years we have seen title insurance protect other clients and enable them to sell or refinance their property when that would have been otherwise impossible due to an unexpected title issue that came up. Without this coverage, they would not have been able to sell or refinance their property without hiring an attorney to clean up title defects. That would have taken a long time and could have been very expensive. It could even require going to court to finalize a title problem. It would also have cost our clients the ability to sell or refinance at that time. The bottom line is that it would have put their lives on hold indefinitely if they needed to sell or refinance.
Here are a couple of links that have excellent information about owner’s title insurance:
Like any other insurance, you only discover how valuable it is when you need it. Based on what we have seen over the years, we highly recommend the purchase of owner’s title insurance at closing.
The closing attorney will provide you with the cost of the title insurance policy. It is based on a complicated formula that we do not have access to. If you are using an attorney that we have referred, the cost of an upgraded owner’s title insurance is typically included on your final closing statement, which you will review prior to closing. Otherwise, you should discuss this with your lender’s closing attorney. Please confirm that you received this email and let your GBHT agent know if you have any questions.
Thanks for trusting us with your real estate purchase!