Financing in 48843>Question Details

bradcalvi, Home Buyer in 48843

How is Lender's Title Insurance handled as a closing cost?

Asked by bradcalvi, 48843 Wed Mar 12, 2014

I understand what it is but I am unsure how it is handled as a closing cost. Will I need to buy it from an insurance company? Or am I basically paying the lender directly for having to purchase it?

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When buying a home with a mortgage, there will be two Title Insurance policies put in place by the title company. One is the buyer's policy which is generally accepted to be a seller cost. The second is the lender's policy which is generally accepted to be a buyer cost.

The seller will pick the title company (who does several things in the process). The buyer may choose to have the seller's title company handle everything or to secure their own title company to handle the things that are important to them. (This is usually advisable when buying bank owned property.)

The title company insures the deed and will charge their fee for it at closing. Who pays it depends greatly on the contract or purchase agreement that is negotiated between buyer and seller. If the seller is paying concessions toward closing costs, the lender policy will be charged to the buyer, but the fee will come out of the funds the seller is providing as concession.
0 votes Thank Flag Link Thu May 8, 2014
If you are getting a mortgage, the lender will require a lender's title policy. The title company who is handling the closing offers & charges for it. It can be paid by you or the seller (or your RE agent if they are willing) or even the lender if you opt to take a slightly higher interest rate which will give you a closing cost (lender) credit.

Shane Milne | Lending in all 50 states | NMLS #81195
shane@thebesthomeloans | 949-273-4161 direct
0 votes Thank Flag Link Wed Mar 12, 2014
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