Colony Title Associates

Owner’s vs. Mortgagee’s Title Insurance Policies

Make sure you’re completely covered with owner’s and mortgagee’s insurance before you move in!

We have discussed many times the importance of title insurance in the home buying process. It is designed to protect you and your heirs from any discrepancies in the title and any claims or liens by third parties. If it is proved later that the title was invalid, the insurance covers the cost of the property. Today we’re going to take a look at the two types of title insurance policies you might be required to purchase – the owner’s policy and the mortgagee’s policy.

Owner’s Policy

The owner’s policy is typically optional but strongly advised. It protects the purchaser of the property if the title passed to you is invalid, encumbered by a debt or lien, or if various issues such as accessibility affect the value of the land later on. This last issue may be a problem, for instance, if the only method of entering or exiting the land is through another owner’s property.

Mortgagee’s Policy

This policy protects the lender – most often this is your mortgage company. Banks nearly always require a home buyer to buy a mortgagee title insurance policy. These policies offer the same protections as an owner’s policy but cover the lender’s interests instead of your own.

Look into Both Policies

It is advisable that prospective home buyers check out and obtain both kinds of policies. If there’s any indication at all that the title may be disputable, purchase both. A quality title company can investigate the history of the title and offer savings on the policies. Don’t forget that title insurance is not the same thing as homeowner’s insurance – homeowner’s insurance will not protect you from legal disputes of ownership! Only title insurance grants you and the lender this protection.

A Title Company You Can Trust: Colony Title

At Colony Title, we will help you through the process of getting your property’s title and help you avoid the pitfalls of hidden costs while you buy your home. We are also well trained in identifying any and all errors in public records and helping you resolve them. We specialize in real estate title insurance in both Maryland and Washington, D.C., and we will perform an expert title search, check through all past documentation, and examine records for any fraud or forgery. For more information on how we can get you into the home of your dreams, contact us online or give us a call at (410) 884-1160. To get more updates on housing markets and how to get into your home, follow us on FacebookTwitterLinkedIn, and Google+.