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Q.What is title insurance?
A.Title insurance is designed to protect the buyer of, and mortgage lender on, property from losses that result from any known or unknown defects in the chain of title received from the seller. Buyers are often required to purchase a lender's title insurance policy to protect the mortgage company, or bank, from losing its interest in the property; and the buyer should also want to obtain an owner's policy to protect his or her own interest in the property from a potential claim that title is defective. Typically, a title insurance policy is purchased by paying a one-time fee equal to approximately one percent of the purchase price of the property. In some parts of the country, the buyer pays for this policy, while in other parts of the country, the seller provides it, but in any case it's an item that can be negotiated between buyer and seller.
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