Owner's vs Lender's Title Policy: Key Differences
Buying a home involves many documents, fees, and insurance requirements that can feel unfamiliar. Title insurance is one area that often creates confusion. Two common types are an owner's title policy and a lender's title policy. Although they are connected to the same real estate transaction, they protect different parties and serve different purposes. Understanding the difference between these policies can help buyers make better decisions during closing. A lender usually requires protection for its financial interest in the property, while a buyer may choose coverage that protects personal ownership rights. Knowing what each policy covers, who benefits from it, and how long the protection lasts can make title insurance much easier to understand. What an Owner's Title Policy Protects An owner's title policy protects the person who purchases the property. It helps protect the buyer's ownership interest if certain title problems are discovered after closing. These p...