There are two types of title insurance, Owner’s Policies / Mortgagee Policies

Owner’s Policies/Mortgagee Policies There are two types of title insurance; owner’s title insurance (an Owner’s Policy), which protects the buyer, and lender title insurance (a Mortgagee Policy), which protects the lender. In a typical residential transaction, the title insurance often required by the mortgage lender will not safeguard the rights and interests of the homebuyer; therefore, a separate Owner’s Policy is necessary. An Owner’s Policy is typically issued in the amount of the real estate purchase price and remains in effect for as long as the owner, or his or her heirs, retains an interest in the property. In addition to identifying risk before a transaction is completed, the Owner’s Policy will pay valid claims and all defense costs against attacks on the title. A Mortgagee Policy assures the lender of the validity, priority and enforceability of its lien (mortgage) – serving as protection for the lender’s security interest in the property. A Mortgagee Policy is issued in the amount of the loan and liability decreases as the mortgage debt is reduced. Who pays for the title insurance is indicated in the terms of your contract. In some Florida counties it is customary that the seller purchases the Owner’s Policy for the buyer, in effect telling them the title is clear.

Post a Comment

Your email is never shared. Required fields are marked *

*
*