Lender’s title insurance is a type of insurance that protects the lender from any financial losses that may incur as a result of owning a property, while you’re paying them back for the loan.
Lender’s title insurance works like a backup plan to protect the lender in case any unforeseen issues surface that were not discovered during a title search. These issues can range from an undisclosed heir to a mistake in ownership history. These title issues may result in casting doubt on the ownership of the property and potential cause you to lose ownership of it.
Here are some common questions and answers about lender’s title insurance.
- Am I legally required to buy a policy?
- Is this the same as the owner’s policy?
- If the lender’s policy is purchased, do I still need an owner’s policy?
- How much does a lender’s policy cost?
- Who pays for the lender’s title insurance policy?
- Who picks the lender’s title insurance policy?
Am I legally required to buy a policy?
Yes, you are legally required to buy a policy, and most lenders require that the borrower (the home buyer) purchase the lender’s title insurance policy. The lenders requires this to protect themselves in case someone lays claim to your property. [Read more…]