Final answer:
The buyer is not necessarily required to pay the premium for the owner's title insurance policy, which depends on local practices and home-buying negotiations. Escrow accounts facilitate the payment of home insurance and property taxes. Buyers with lower down payments may need to purchase mortgage insurance.
Step-by-step explanation:
The buyer is not always required to pay the premium for the owner's title insurance policy; it often depends on local custom and negotiation during the home-buying process. An insurance premium is the amount paid for an insurance policy. In real estate transactions, there are two types of title insurance: owner's and lender's. The lender's title insurance is typically required and paid for by the borrower, protecting the lender's interest in the property. However, owner's title insurance, which protects the buyer's interests, is optional, and its cost can sometimes be negotiated with the seller.
When it comes to paying property taxes and home insurance, an escrow account can be used to simplify the process. This account is managed by a third party and is part of the monthly mortgage payment, ensuring that these expenses are paid on time. For buyers with less than a 20% down payment, mortgage insurance may also be necessary, which protects the lender in case of default and is an additional cost to the borrower.