The Real Estate Blog

Title insurance-- lenders policies vs. owner's policies

December 1st, 2011 1:23 PM by Wendy Thomas

When you get to the closing table, most of the time, the attorney will share with you the title insurance that has been figured into your closing costs.  He or she will discuss with you this being the "lender's policy", and then typically he/she will have already added in another amount for title insurance.  He'll tell you that the other amount is optional but it's your homeowner's policy.  Most of the time with buyers, this information goes in one ear and out the other.  So do you really know the difference between the two types? Do you even know what title insurance is?

Title insurance is a policy that protects the lender (in the case of the lender's policy) should anything or anyone come up that would cause a problem with the title on the property.  Case in point, here in Rock Hill, a problem arose when the Catawba Indians brought up that some land was taken from them, not sold by them.  People who owned that land, if they had a lender's policy, that protected the lender and the money that they lent on that property. But what if you were the owner at that time?  If you had an owner's policy, your policy would hire an attorney and fight for you, and cover your interests in the property.  If you didn't have an owner's policy? You would most likely be homeless, unless you personally paid for the attorney to fight for you, which can get very costly. 

The point is that although a closing can be very expensive and closing costs add up quickly, a $350 or $450 additional charge that will provide you more security is well worth the money.   I'm attaching a link to some informational sheets provided to me by Tom Givens, Attorney at Law in Rock Hill. Please forgive the coloring of the sheets. But they are full of information regarding title insurance, and why you should have your own policy.

As always, if you have any questions, please don't hesitate to ask!


Posted in:General
Posted by Wendy Thomas on December 1st, 2011 1:23 PM


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