Mortgage Answers / Homebuying Decisions
The Short Answer
Title insurance addresses certain covered problems with property ownership rights. A policy protecting the lender and a policy protecting the owner have different jobs. Read the coverage, exclusions and exceptions with the title professional before closing.
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Explore Your OptionsLender and owner policies differ.
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The lender's policy protects the lender's covered interest. Do not assume it gives you the same protection as an owner policy.
Ask which lender policy is required for this loan and who is arranging it.
Review the cost and what interest the policy protects. Do not assume it is a general home-condition policy.
Ask the title professional whether separate owner coverage is offered and what it would cover.
Owner coverage is a separate question from the lender's requirements. Ask what the proposed policy does and does not cover.
Ask for a plain-language explanation of the proposed owner policy.
Review the exceptions, exclusions and cost. Do not assume every possible ownership problem is covered.
Ask the title professional or attorney to explain anything unclear before closing.
An exception or ownership issue needs a specific explanation. Insurance does not mean every listed problem is covered.
Identify the listed issue or exception and ask the title professional what it means.
Ask whether any documents, payments or other action are needed before closing.
Discuss unresolved ownership or contract concerns with the appropriate professional before signing.
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Title insurance addresses certain covered problems with property ownership rights. A policy protecting the lender and a policy protecting the owner have different jobs. Read the coverage, exclusions and exceptions with the title professional before closing.
An exception or ownership issue needs a specific explanation. Insurance does not mean every listed problem is covered.
Closing costs are fees and charges involved in completing your mortgage and home purchase. They are separate from your down payment. Your Loan Estimate shows the expected amounts; actual costs depend on the loan and transaction.
Your lender may require homeowners insurance, but its requirements are not the same as choosing all the protection you need. Compare coverage, exclusions, the amount you pay on a claim and the cost. Ask about separate protection for risks a standard policy may not cover.
Not every assistance program has the same first-time-buyer rule. Some programs have their own definition, exceptions and other requirements. Ask about the actual program before assuming you qualify or that past ownership rules you out.
No. They protect different interests. Ask the title professional to explain each proposed policy.
No. Review the actual coverage, exceptions and exclusions before relying on the policy.
No. Title insurance concerns covered ownership-rights problems, while an inspection examines physical condition.
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Boulder, CO
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