Title Insurance
Title insurance is a policy that protects the lender and/or the buyer against financial loss resulting from defects in the property's title — such as undisclosed liens, ownership disputes, or recording errors.
There are two types: a lender's title policy (required by the lender) and an owner's title policy (optional but strongly recommended). The lender's policy protects the lender's interest in the property, while the owner's policy protects the buyer's ownership rights.
Title insurance is not the same as homeowners insurance. It covers issues with the legal ownership of the property, not physical damage. A title search is conducted before closing, but title insurance provides protection for issues the search may not uncover.
Why This Matters: Title issues can surface years after closing and threaten your ownership of the property. An owner's title policy is a one-time cost at closing that provides lifetime protection — and it is one of the most overlooked safeguards in real estate.
Common question
Do I need owner's title insurance?
The lender requires a lender's policy. An owner's policy is optional but strongly recommended — it protects your ownership from liens, errors, or disputes for as long as you own the property.
What does title insurance cover?
It protects against defects in the property's title — such as undisclosed liens, ownership disputes, or recording errors. It is a one-time premium at closing for lifetime coverage.
Related Topics
Related Mortgage Terms
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