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Ins and outs of title insurance
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Tip for first-timers
A lender's policy of title insurance won't protect the buyers' interest, but buyers can get title insurance for their own protection. Even if you're paying all cash for a property, and won't need a mortgage, it's wise to obtain a title insurance policy to protect yourself. Title insurance for the buyer can be paid for by either the buyer or seller. Who pays is often determined by local custom. The cost is based on the purchase price: the higher the price, the higher the title insurance premium.

Searching the records
Before issuing a policy of title insurance, title examiners search the public records for records that affect the property in question: such as liens, judgments and easements. An easement grants the right to use another person's property for a specific purpose

The title search is designed to dig up all of these things and more. Later, if there is a dispute and a lawsuit over ownership of the property because the title search was faulty, the title insurer pays legal fees and any settlement amount. When you pay for title insurance, you're paying for two things: the title search and the insurance policy that pays the costs of future legal proceedings.

There are two kinds of title policies when you buy a house. One covers the lender (you have to pay) and the other covers you, the buyer. You'll always be required to get the former, and it's often a good idea to buy the latter.

Make sure you understand the kind of title insurance you're buying, for there are several kinds available. If you have a question about anything in your title search, ask your title insurer or attorney for an explanation before you close.'s corrections policy -- Updated: June 12, 2006
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