Do You Need Title Insurance When Buying a Home in Orange County, NY?

By Ammar Iqbal | Real Estate Salesperson, eXp Realty

If you are buying a home in Orange County, NY, you will see "title insurance" on your closing cost estimate. Many buyers ask the same question: do I really need it? Here is a simple explanation of what it is, who pays for it and why most buyers get it.

What Is Title Insurance?

"Title" means legal ownership of the property. Before you close, a title company searches public records to make sure the seller really owns the home and that there are no unpaid liens, judgments, open mortgages or boundary problems attached to it. Title insurance protects against problems that were missed in that search or that come to light later, such as a forged signature in an old deed, a recording error or an unknown heir who claims an interest in the house.

Unlike homeowners insurance, you pay for title insurance once, at closing, and it covers past problems rather than future events.

Lender's Policy vs. Owner's Policy

• Lender's (loan) policy: If you are getting a mortgage, your lender will require this. It protects the bank's interest in the home up to the loan amount.
• Owner's (fee) policy: This one protects you and your equity. It is usually optional, but it is the policy that pays for your legal defense and covered losses if someone challenges your ownership.

Cash buyers are not required to buy a lender's policy, but most still choose an owner's policy because the home is often their biggest asset.

Who Pays for Title Insurance in New York?

In New York, the buyer typically pays for both the owner's policy and the lender's policy, along with the title search and some recording-related fees. Title insurance rates in New York are regulated by the state Department of Financial Services, so premiums for the same coverage tend to be similar from company to company. The cost depends mainly on the purchase price and loan amount. Your real estate attorney usually orders the title work and reviews the report with you before closing.

For a full picture of what you will pay at the table, see our guide to closing costs in Orange County, NY, and learn what your lawyer does in do you need a real estate attorney in Orange County.

Is an Owner's Policy Worth It?

For most buyers, yes. Many homes here in Middletown and across Orange County have been sold many times over the decades, and older records can contain mistakes. An owner's policy is a one-time cost that lasts as long as you or your heirs own the home. Ask your attorney for a quote early so there are no surprises.

Next Steps

If you are starting your search, browse homes for sale in Middletown, NY or learn more about the area on our Middletown, NY guide. Still in the early stages? Read how to get pre-approved for a mortgage. Thinking about selling your current home first? Get a free home value estimate.

Have questions about title insurance or the closing process? Contact me and I will walk you through it.