When you have already made a competitive offer on a property, there can be a bit of sticker shock when you see how much closing costs will increase the price. The amount of money you have to bring to the table will be thousands of dollars more than your offer.
Many real estate buyers look closely at their settlement statements for charges they can eliminate or reduce. It is common for buyers to question why they must pay for two title insurance policies. One is for the lender underwriting the mortgage and one is for you as a buyer.
Do you really need the protection of two policies?
You can only decline your own coverage
One of the many obligations you have to your mortgage lender is the requirement that you purchase title insurance to protect the investment they make by financing the purchase of your home.
If a title issue arises in the future and you lose the property, the lender’s policy protects them from losing the money they paid for your purchase. This is non-negotiable in purchases involving financing, which means the only policy you could potentially decline is the one that protects you.
A buyer’s policy will pay for a lawyer to represent you during a title claim and will repay you for the money you lose because you did not retain ownership of the property. While it may be yet another expense in a massive transaction, the protection and peace of mind provided are likely well worth the cost. With the coverage, you will have no protection in the event of a title claim.
Learning more about title insurance and your obligations as someone buying a property with financing will help you navigate the complex process of submitting offers and closing on a home.