203(k) Loans and Title Update Fees
If you take out a 203(k) loan, can expect to pay an additional $150 in a title update fee. This is is put in place to protect against builder liens (also known as mechanic’s liens) on the property. Of course, if you are using a 203(k) loan to purchase and renovate your home, you will also typically have to pay for other title-related expenses, such as a title search and lender’s title insurance, which protects your lender against any title claims against your property that could interfere with your ability to pacy back your loan.
Owner’s title insurance, while not required, is an excellent idea, as it protects you, the borrower, from any title claims against your property. Without it, you could potentially lose your home and have no way to recoup your investment.
For 203(k) refinancing, you won’t usually need to pay for a new title search or new owner’s title insurance. However, you will usually need to get a new lender’s title policy. However, many states offer a discount for title insurance if you purchased your original policy within the last 10 years.