With regard to real estate, there are two types of title insurance, Owner’s Title insurance and Lender’s Title Insurance.
The owner’s title insurance, is a one-time fee, which is paid at the close of a purchase transaction and lasts for as long as you or your heirs have an interest in the property.
Owner’s title insurance insures the new owner against any problems on the property title that can potentially arise.
Typically, a title professional will search public records to see if there are any problem with the home’s title, and they’ll also review land records going back many years.
Now the owner’s title insurance can be paid by either the buyer or seller, depending on the county that you live in.
The second type of title insurance that you’ll typically see on a settlement statement, is lender’s title insurance. Whenever you are purchasing or refinancing a property with a home loan, the lender will usually require you to have lender’s title insurance.
This type of policy, protects the lender’s interests in the property as long as you have a mortgage on it. The policy amount decreases each year as the mortgage loan balance decreases and eventually disappears when your loan is paid off.
The amount that you’ll have to pay for these policies, as the buyer or seller, will really be determined by what title company you’re using.