There's no doubt that if you finance the purchase of a home your lender will want title insurance or, in Iowa, coverage under the state's guarantee fund. Title insurance is a specialized insurance policy. If the claim is successful, lender's coverage will pay off any mortgage amount you owe to the lender. In essence, it protects your equity, the purchase price of your home above the mortgage amount, and sometimes more.
Several strategies stand out.
In other words, if there's an existing policy that is five to ten years old, you may be able to get a 10 to 20 percent discount. If you have a buyer's market, ask the seller to pay the tab for title insurance. That's one less cost for you at closing. Title insurance policies normally exclude coverage in the event of lot line debates, unrecorded mechanics liens, and easement problems. Extended coverage can provide protection against such claims.