What’s the difference between lender’s insurance and owner's title insurance?

Title insurance is a type of insurance that homeowners are required to purchase in almost all refinance and purchase transactions. In the process of buying or refinancing a home, the property in question will need to undergo a title search to determine whether there are any outstanding claims, issues, or disputes regarding the ownership of the property. Before any real estate transaction can be completed, you need to obtain clean title search results with no evidence of any issues. After that process is complete you also need to secure title insurance.

There are two types of title insurance: a mandatory lender’s policy that covers the lender, and an optional (but recommended) owner’s policy that covers the homeowner. These insurance policies protect both parties from financial loss in the event that an issue or dispute predating your purchase of the property emerges. (While the title search should provide reasonable confidence that there are no such issues, a title search is not 100% foolproof.)

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More resources

• Do I need to repurchase title insurance when I refinance?
• What is title insurance and why do I need it?
• A guide to applying for your first mortgage