After all of the negotiations over a home are done and a seller has accepted your offer, you will get a home title report in the mail within a week. The title is what actually gives you ownership of the house, and most mortgage lenders will require you to pay title insurance as part of the closing costs. In addition, title insurers search the public records to make sure the home seller actually has the rights to the title and there are no liens on the home.
There are two types of policies for title insurance – owner and lender. Buyers purchasing property with a mortgage lender will want title insurance for themselves, because any policy bought by the lender provides no coverage or benefit for the buyer. This makes the decisions on the owner and lender sides to buy a policy independent from each other. Title insurance is important because, once a sale is created, buyers will have sole responsibility for ensuring the validity of the land title. In the case that a title is later deemed invalid or fraudulent, title insurance prevents the buyer from losing their investment.