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Owner’s and Lender’s Title Insurance, Explained

There are two types of title insurance policies: A lender’s policy, which protects the lender, and an owner’s policy, which protects you.

How are owner’s title insurance policies and lender’s title insurance policies different?

A lender’s title insurance policy:

  • Protects the lender up to the amount of the loan they provided on a mortgaged property
  • Is required by most banks and other mortgage lenders
  • Experiences a decrease in policy value as the loan principal is paid down
  • Expires when the mortgage is paid in full

An owner’s title insurance policy:

  • Protects the owner’s equity in the property
  • Can be purchased in an equal amount to home’s purchase price
  • Lasts for as long as you own the property

Do I have the right to choose my own title company?

Absolutely. In fact, federal law guarantees you the right. This is likely the largest financial that you shop around to find the best fit. With Foundation Title & Escrow, you’ll get:

  • A transaction dashboard that provides real-time updates in FTE Connect
  • Simple to use digital tools that save you time and stress on our website
  • Competitive and transparent pricing (check out our 24|Seven Fees calculators)
  • Knowledgeable local staff supported by centralized resources and an in-house attorneys

Are title insurance policies the same from company to company?

Generally, yes. Title insurance companies offer industry-standard title policies adopted by the American Land Title Association (ALTA) or an individual state’s land title association.

However, while title insurance policies may be similar, not all title companies offer the same level of service. The title insurance and closing process is traditionally lacking in transparency. Our easy-to-access portal makes sharing data and documents easy while maintaining robust security that ensures your personal information and funds are safe.

What is the difference between a “standard owner’s policy” and an “enhanced owner’s policy?” The ALTA Enhanced Policy offers the highest level of protection for homeowners. Some home buyers may not be aware of the risks to title or understand the value of broader coverage—you have a choice.

Enhanced title insurance covers everything in the standard policy and much more, including:

  • Unrecorded mechanic’s liens 
  • Forced removal of a structure if your home violates a zoning restriction 
  • Unrecorded homeowner’s association liens 
  • Building permit and restrictive covenant violations

If you have additional questions on titles and how they are impacting you during the real estate process please reach out to Foundation Title to learn more. 

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