The Difference Between Owners and Lenders Title Policies

The Difference Between Owners and Lenders Title Policies

If you’re buying a new home, you’ve probably heard of title policies. But what exactly are they? And what is the difference between an owners policy and a lenders policy? Let’s break down the two policies to help you better understand the process.

Owners Title Policy
An owners title policy is typically purchased by the buyer of a property. This title policy protects the owner from any title defects that may exist in the property. It also covers things like liens, encumbrances, unknown heirs, and other issues that could cause problems at closing. An owners title policy will cover your legal fees if there is a dispute over ownership of your property.

Lenders Title Policy
A lenders title policy is usually purchased by either the seller or lender of the property. This type of title policy protects them from any issues related to ownership or liens that could arise during or after closing. It also helps ensure that no one else can claim legal ownership of your home after it has been sold and closed on. A lenders title policy does not protect you as the buyer, so you should still purchase an owners title policy to make sure you are covered in case any issues arise with your purchase.

Conclusion:

Title policies are important documents when purchasing a home because they provide protection against potential errors or issues with ownership rights that could arise during or after closing. There are two types of title policies—an owners title policy and a lenders title policy—and it's important to understand the difference between them in order to be fully protected when buying a house. An owners title policy helps protect you as the buyer while a lenders title policy helps protect either the lender or seller from any potential disputes related to ownership rights after closing on your home purchase. Make sure to get both policies if you’re purchasing a new home!