| Title Insurance |
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Title insurance assures homeowners and mortgage lenders that a property has a marketable (valid) title. If, for example, someone makes a claim that threatens your ownership of the home, the title insurance company protects you and the lender against loss or damage, according to the terms and provisions of your respective title insurance policies. Title insurance assures homeowners and mortgage lenders that a property has a marketable (valid) title. If, for example, someone makes a claim that threatens your ownership of the home, the title insurance company protects you and the lender against loss or damage, according to the terms and provisions of your respective title insurance policies.Most of your title insurance premium is spent on research to determine who legally owns the property that you want to buy and to find out whether there are any unpaid tax liens or judgments recorded against it. Because title companies do a good job of eliminating title risks before folks buy property, only about 10 percent of the premium goes toward indemnifying homeowners against title claims after the closing. You pay this premium only once at close, unless you refinance your mortgage. If you refinance your mortgage, you'll have to get a new title insurance policy to protect the lender from title risks (such as income tax liens or property tax liens, for example) that may have been recorded against your property between the time your previous policy was issued and the date of the refinance. If you refinance your loan, ask the title company whether you qualify for a refinance rate on the new title-insurance policy. Most title companies will give you a big premium reduction -- as much as 30 percent off their normal rates -- if you are within five years of the old policy's issuance date.
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