Lender’s title insurance is an insurance policy that insures the lender that there will be no other liens on the title before the lender’s lien position. This is required with all mortgages. This will protect the lender against problems with the title to the property. The cost of the lender’s title insurance ranges depending on the loan amount. This would be a onetime upfront cost. The buyer generally would be paying for the title of the insurance. The lender’s title does not protect property owners’ equity it only protects the title to the loan amount.
The purpose of the title insurance means your lender is protected against any claims from defects. The defects can be anything or anyone claiming an ownership interest of your property or improperly recorded documents, fraud, liens, and much more. There are steps to getting a lender’s title insurance for a home. First at title company or a law office must perform a title search to make sure they are closing any open liens against the title. An example of this would be a mortgage on the property that may be paid off. Also a survey will be needed too in order to make sure that there are no issues with the boundary of the property.