How to save money on title insurance

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THE DIFFERENCE BETWEEN A NEW TITLE INSURANCE POLICY AND AN UPDATED TITLE INSURANCE POLICY

New Title Insurance Policy

A new title insurance policy is issued during the purchase or refinancing of a property. It is a comprehensive insurance product that provides protection against defects or issues with the property’s title that may have arisen in the past.

Key Features:

1. Purpose:
   • Protects the buyer and/or lender from any claims or disputes regarding the ownership of the property.
   • Covers issues such as liens, encumbrances, or other title defects that were not uncovered during the initial title search.
2. Coverage:
   • Owner’s Policy: Protects the buyer’s interest in the property up to the purchase price.
   • Lender’s Policy: Protects the lender’s interest in the property up to the amount of the mortgage.
3. When It’s Needed:
   • Required during the purchase of a property.
   • Often mandated by the lender during refinancing.
4. Costs:
   • Typically, it is higher than an updated policy.
   • Owner’s Title Insurance: Usually costs between 0.5% to 1% of the property’s purchase price.
   • Lender’s Title Insurance: Costs vary but are often less expensive than an owner’s policy and are usually based on the loan amount.
   • Premiums are paid once at closing and provide coverage for as long as the buyer or lender has an interest in the property.

Example Scenario:

• Buying a Home: When purchasing a new home, a new title insurance policy is often required to ensure the buyer and lender are protected from any past title issues.

Updated Title Insurance Policy

Savings Alert! (Industry Pro Secret)

Note: An updated policy can be a great way for buyers to save money – although regulatory agencies generally set title insurance rates with filed rates and cannot be discounted – if the property has been recently sold or refinanced in the last 2-4 years and the current policy on the property is recent, it may be possible to just get an update to the owners existing policy at a much cheaper rate. Always check to see when the last time the property was sold or transferred and then request the existing title information. You may be able qualify for an updated policy instead of a new one and get a substantial discount. At House Karma and SaveX – that is the first thing we do for buyers working with us. If we can save you money we will.

An updated title insurance policy, also known as an endorsement or date-down endorsement, is an adjustment or continuation of the existing title insurance policy to reflect any changes since the original policy was issued.

Key Features:

1. Purpose:
   • Updates the title insurance coverage to include any new developments or changes that have occurred since the original policy.
   • Provides assurance that no new liens or encumbrances have been placed on the property since the last policy date.
2. Coverage:
   • Covers new transactions affecting the title, such as additional loans or improvements to the property.
   • Usually supplements the original policy without altering the main terms.
3. When It’s Needed:
   • Typically used in refinancing, construction loans, or other scenarios where there have been changes to the property or ownership details.
   • When a property is sold again within a short period, and the original title policy can be extended to cover the new transaction.
4. Costs:
   • Generally lower than a new policy.
   • Costs are often a fraction of the original policy’s premium, sometimes calculated as a percentage of the changes covered (e.g., additional loan amounts).
   • Pricing can vary widely based on jurisdiction and the specifics of the update.