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lender has added OTI for $1258 to settlement charges. This is a new construction in a planned development, jumbo loan 30 yr fixed.
1) Am i required to have OTI?
2) Should I just do the simple thing (and not do anything) or should I shop it around to save a few $?
Thanks
I've never seen a lender who didn't require it. If you think about it, they are risking their capital (even if there is a small risk of an ownership challenge) and the insurance is what protects them. In fact, the title insurance also protects your risk, too, assuming you have some personal investment in this house. Remember, if problems like those protected by the insurance never happened, there'd be no market for the insurance. It may seem extremely unlikely but things go wrong from time to time.
OTI is required on every financed loan. As for shopping it, it depends on where you are. In Texas, title insurance is regulated so you'll pay the exact same money at every single title company across the state.
Lender's title insurance is required. Owner's is optional.
Op, do you trust builders? I inform clients that the owner's is optional, but I tell them they "have" to buy it. If you close through the same title company as the builder used for the development, you may get a discount.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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It's more important than on a used home purchase. Normally you have to worry about a mortgage, tax liens, 2nd or 3rd mortgages or maybe a utility provider lien. With new construction add to that all of the subcontractors and material suppliers that may be
owed money.
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