Lender's title policy
Title insurance that protects the lender, not the buyer. Required by almost every lender. Paid by the buyer, but for the lender's benefit.
Your Room opens on going under contract and closing, with the offer and everything before it already ticked.
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See how it worksWhere this comes up: closing
Part 1 of 4
Why a seller cares
The buyer's lender insists on a title policy in its own name, and the buyer usually pays for it. It appears on the settlement statement and is one reason a cash buyer's closing costs are lower.
Part 2 of 4
A simple example
A $240,000 loan on your $300,000 sale. The lender's policy covers the $240,000, and the buyer pays for it at closing.
| The policy | Who it protects |
|---|---|
| Lender's policy | The lender, for the loan amount, for as long as the loan exists |
| Owner's policy | The buyer, for the purchase price, for as long as they own |
| Neither, on a cash sale | Nobody, unless the buyer chooses an owner's policy |
Two policies, one title search. The lender's protects the loan, not the person.
Part 3 of 4
What people get wrong
That the lender's policy protects the buyer. It does not, which is why an owner's policy exists at all.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
In your Room, this word explains itself where it appears.
Your Room defines lender's title policy in the step you meet it in, beside the document or the date it belongs to. Free to set up, with an agent or on your own.
Organize my saleFree to set up. Pay once when you list: $89 or $189. 7-day refund.