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Do I need title insurance when I buy a new home?
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Yes, once you have accepted a contract to purchase a home, a title company will search the public records to look for potential problems. Title problems may limit your use and enjoyment of the property as well as bring financial loss.
A title search reviews the land records and can go back many years. More than one third of all title searches reveal a problem so the title company will require that these items be addressed prior to closing.
Some examples of problems may be:
- Failure to pay property taxes or water/sewer accounts
- Construction on the property that was not paid for
- Errors or omissions from deeds and legal descriptions
- Mistakes in examining records
- Forgery
- Undisclosed heirs
Owners Title Insurance and Lender's Title Insurance.
Title insurance is purchased for a one-time fee at closing. Owner’s protection can last for as long as you or your heirs have an interest in the property and Lender’s protection can last for as long as they maintain a valid mortgage on the property.
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Do I need to purchase title insurance when I refinance?
Yes. The Owner’s Title Policy you received when you purchased the property is only valid for you, for as long as you and your heirs own an interest in the property,
When you refinance, your lender wants to be insured that the home is free and clear from any new liens such as unpaid taxes, construction liens, homeowner association dues or child support arrears. This is why they require a new title search to be completed each time you refinance and a new Loan Policy to be issued as well.