Typically, there are two different kinds of title insurance policies: a lender’s policy and an owner’s policy. For brand-new home buyers, the title insurance process and overall home buying experience can be incredibly overwhelming. That is why we are here to help clarify some of the confusion and assist in explaining the different title insurance policies available and the benefits of each.
The Lender’s Policy
Generally speaking, a lender’s policy protects the lender if a title claim is made against the insured. In fact, a mortgage lender’s policy will always need to be purchased if a homebuyer is seeking a loan when buying a new home. When a homebuyer obtains any loan on a property, the mortgage lender will require that the homebuyer purchase a lender’s title insurance policy. The mortgage lender is always looking to protect its interest in the property. As a result, if a covered claim happens to be made against the property, the title insurance will be able to protect the lender’s investment. For the most part, these policies are issued for the amount of the loan or mortgage. Quite often, however, the value exceeds the amount of the mortgage thereby leaving a significant gap in coverage for the owner’s interests.
The Owner’s Policy
Which leads us to the controversial owner’s policy. While the owner’s policy is an optional title insurance policy, it can benefit a lot of homeowners looking to have maximum coverage of their interests and investments. In fact, the purpose of the owner’s policy is to just protect the owner for any monies at risk put toward the property. What this means is that if an insured claim occurs on the property, the owner is protected and covered. Sometimes, an enhanced owner’s title insurance policy is available which covers and protects owners from a lot more than the basic version. As a result, consulting a professional title insurance broker is ideal to thoroughly understand whether a homebuyer really should invest in an owner’s title insurance policy, and if so, whether an enhanced or basic version is best.
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 Facebook, Twitter, LinkedIn, and Google+.