Educating the consumer greatly helps in advocating smooth and affordable real estate transactions for everyone concerned, and that is why we are issuing perspective on who exactly needs title insurance, from all sides involved.
On the Lenders Policy: if a mortgage is obtained in order to purchase property, nearly all lenders require that the homebuyer purchase the lender’s title insurance policy for an amount equal to the loan.
A lender’s title insurance policy is issued to the party’s mortgage lender. The lender’s title insurance policy provides the lender protection from covered losses arising from any previously unknown defects in the title that have become known only after the insured property has been financed.
The lender’s title insurance policy will remain in effect until the amount financed has been repaid, the property is resold, or until refinancing has occurred.
On the Owners Policy: either the home seller or the homebuyer may purchase an owner’s title insurance policy. In many areas sellers pay for the owner’s title insurance policy as part of their obligation in the transfer of title to the homebuyer.
The party paying for the owner’s title insurance policy can be negotiated during the purchasing process. An owner’s title insurance policy is issued to a homebuyer, and provides the homebuyer protection from covered losses arising from any previously unknown defects in the title that existed at the time of purchase and became known only after ownership of the property was acquired. An owner’s title insurance policy remains in effect as long as you own or maintain an ownership interest in the insured property.
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