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.
