Lender’s Policy vs. Owner’s Policy 101

April 28, 2021
Home Sellers

There are generally two types of title insurance in a residential real estate transaction: owner’s title insurance, called an Owner’s Policy, and lender’s title insurance, called a Loan Policy.

If buying or refinancing a property – land or a home – a lender will require title insurance in order to protect their investment in the mortgage. This lender’s policy protects the lender’s investment against  any title issues that arise and impact the lender’s interest in the property. It does not protect the buyer. In contrast, an Owner’s Policy provides protection for as long as you or your heirs have an interest in the property. Learn more about owner’s title insurance HERE.

The cost of the Loan Policy is usually based on the dollar amount of your loan. The policy amount decreases as you pay down your loan and eventually disappears as the loan is paid off.