Title Insurance: Is It Required?
When it comes to title insurance, one of the biggest questions out there is whether it's actually required. The answer is often yes, but not always. Keep reading to find out when title insurance is absolutely required, and when it's just a really good idea.
If You Have a Mortgage, You'll Need Lender's Title Insurance
As you might already know, there are two kinds of title insurance, lender's policies and owner's policies. Most, if not all, lenders require borrowers to purchase a lender's policy as a condition of getting a mortgage. In some states and counties, however, the seller of a property is customarily responsibly for paying. Without a lender's policy, the lender won't be protected if a title issue prevents the borrower from repaying their debt.
Owner's Policies Aren't Required, But You Should Still Get One
Unlike lender's title insurance, owner's title insurance isn't required. However, it's usually a very smart idea to purchase a policy. An owner's title insurance policy will protect you for the full price of your property, and will pay for your legal defense in court should a serious title or ownership issue arise. Without an owner's policy, you could be out hundreds of thousands of dollars in equity, and still be responsible for a mortgage on a property that you don't even legally own.