Title Topics: Who pays for Title Insurance?
First, you should get to know the basics of title insurance. There are two types; a Mortgage Policy and an Owner’s Policy. To understand the difference, click here.
In a purchase transaction, a homeowner needs both a Mortgage Policy of title insurance and an Owner’s Policy of title insurance. With most title procedures, it depends on the state and local customs. In the state of Michigan, for example, the seller will pay for the new homeowner’s title insurance policy. However, in Georgia, the buyer of the home will usually pay for both the mortgage policy and the owner’s policy of title insurance. Who pays for the owner’s policy insurance in a purchase transaction can always be negotiated. And that’s typically done by your realtor, real estate agent, or through the contractual obligation of the purchase agreement.
For a refinance transaction, the homeowner only needs to acquire a Mortgage Policy. An Owner’s Policy of title insurance insures the homeowner for the entire time that they own the property, therefore, the homeowner does not need a new one while refinancing. The homeowner usually always pays for the
mortgage policy during a refinance transaction.
So, to answer our initial question, our response is that it always works in your favor to have title insurance, no matter who’s paying for it! To learn more about how title insurance protects homeowners from potential losses, click here.
Any questions or comments? Please let us know!