When purchasing a home or other real estate lots, the lender requires the lender’s title insurance policy. Lender’s title insurance is used to protect your lender against the problems with the title to your property such as someone with a legal claim against your home,you are the first person responsible. However, it protects your investment in the property. To cover your investment, you may have to purchase, the owner’s title insurance policy.
Most lenders will not approve a buyer for a mortgage unless they purchase the lender’s title insurance. When buying a home or other real property, a number of problems or defects may arise with the title. The most common problems include the contractors who were not paid for the work done to the home prior to its sale and the real estate taxes that were unpaid by the previous owner.
When these problems arise, the lender’s title insurance covers the lender’s investment. The Lenders recognize that numerous factors can lead to the claims against the title, and they are all too aware of the extensive costs that can be incurred when defending on an attack on the title. When the buyer purchases the title insurance, but, the title company agrees to defend the lender in the court and it covers any and all costs incurred.