Should I get mortgage and title insurance?


Getting mortgage and title insurance is usually expected from the homebuyer. Despite the fact that getting mortgage insurance basically protects the lender, it is commonly advertised as family protection in case of death or injury of the main provider for the family.

Even though purchasing mortgage life insurance does make sense if you don't have life insurance yet or are not eligible for coverage, most people do have life insurance coverage already and buying separate mortgage repayment insurance may not make much sense.

Lenders Want Title Insurance

Though the lender may not insist on mortgage life insurance, they surely will ask that you purchase lender title insurance. This title insurance will protect the lender up to the full amount of the loan should ownership issues or old liens are discovered.

If you want to be protected with the title insurance, you'll have to purchase owner's title policy. It is not obligatory to buy one, but is recommended, for the same reasons as stated above - from potential claims on the property arising after you bought it.

Shopping for Title Insurance

Title insurance costs vary largely among the different states. In some states, as Texas, don't bother shopping for title policy - rates are set by the state. In other states, though, it pays to do the shopping - neither the title premium, nor title search and examination fees are set by the state and the borrower should certainly shop for title insurance.

Some of the states that don't regulate the costs pertaining to the title insurance are Alabama, Georgia, Hawaii, Massachusetts and others.

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