Lender's Policy vs Buyer's Policy

Title insurance comes in two main forms: lender's policies and buyer's policies. While similar, these two policies offer distinctly different services for the parties they serve. If you're planning on buying a Lake of the Ozarks home in 2015, it's important that you know the difference between these policies. Lucky for you, Arrowhead Title, Inc. is here to help!

Owner's Policy

In the world of title insurance, the owner's policy essentially protects you, the owner of the property, from unforeseen issues down the road. Owner's Title Insurance is purchased at closing for a one-time fee. After this upfront payment, both you and your heirs will be protected from any problems that may arise in the future for as long as you or your heirs and an interest in the property. 

The best part? If/when a situation arises that requires the protection of your owner's policy, those issues will be handled at no additional cost to you. Owner's policies only cost you the upfront, one-time fee.

As examples, the types of situations an owner's policy can protect you from include...
  • Forgeries
  • Mistakes in public records
  • Undisclosed heirs
  • Unauthorized signatures
  • Invalid power of attorney

 Please don't hesitate to reach out to us for clarification! We would be happy to any questions you may have about owner's title policies.

Lender's Policy

The sole purpose of a lender's title policy, on the other hand, is to protect the lender. When you take out a mortgage loan to buy a house, the lender (i.e., the bank) spends the money to pay the seller upfront. Then you, the buyer, will spend the next fifteen, twenty, or thirty years paying the lender back. A lender's title policy promises financial protection to the lender in the event of a defective title or if you are unable to pay off your mortgage loan.

It's not surprising that most lenders require lender's title policies to be included in the real estate transaction. Typically, the buyer is responsible for purchasing the lender's policy. 

Conclusion

Since the lender's policy offers you no protection whatsoever, all of us at Arrowhead Title, Inc. strongly encourage you to purchase an owner's title policy as well. When purchased in conjunction with a lender's policy, owner's policies are extremely affordable (and remember, they only require a one-time, upfront fee).

 If you are preparing to purchase property at the Lake of the Ozarks, we hope you'll keep Arrowhead Title, Inc. in mind. We treat all of our clients with the utmost respect, integrity, and accuracy. See you at closing!
Where Accuracy Matters!



Location: Lake Ozark, MO 65049, USA

Comments

Post a Comment

Popular posts from this blog

Title Commitment vs Title Report

Image
Do you know the difference between a title commitment and a title report? While these documents may sound similar at first, they actually serve very different purposes and should not be confused. As your trusted title company at the Lake of the Ozarks , Arrowhead Title is here to help clear up any misunderstandings you may have about title commitments and title reports. Title Commitments Title commitments are issued when someone is in the process of buying a home or piece of property. After the title search has been conducted (that is, after your title company has thoroughly researched the public documents for any pertinent information regarding the property), the next step is to issue the title commitment.  The title commitment is exactly what it sounds like: a commitment  to provide title insurance to the lender and the buyer under the terms described. The title commitment outlines the conditions and exceptions that will impact the title insurance policy. Conditions to
Read more

9 Fun Facts About Title Insurance

Image
Title insurance is a crucial part of buying real estate, whether a home, business, or commercial or residential plot of land. Without title insurance, your right to use and occupy your new property may be hindered by rights and claims asserted by others - potentially even years after the closing date. Despite its incredible importance, title insurance is largely misunderstood (if it's understood at all) in the general community. Arrowhead Title, Inc. is here to educate you on our unique industry by filling you in on these fun facts about title insurance. Fun Facts About Title Insurance 1.   Benjamin Franklin was the first person to come up with the concept of title insurance. 2.   Title insurance's primary focus is proactive, not reactive - it aims to prevent issues from ever arising in the first place. 3.   Title insurance is available in several other countries (not just the States). For example, it is used in Northern Ireland, Canada, Mexico, New Zealand, Austra
Read more

Why Would I Need a Title Search vs Owners and Encumbrance

Image
Purchasing your Lake of the Ozarks home can come with a few unexpected expenses.  When faced with the decisions of what title insurance to choose when buying your home, count on Arrowhead Title, Inc. , to help accurately answer the questions you may have.  O&E vs Title Search As a new home buyer, the question of whether to get a full title search or an owner and encumbrance (also known as a title report) may come up in your home search process.  It is important to first understand the difference between the two.  Owner & Encumbrance Owner and encumbrance reports are simplified non-insurance title reports designed for informational purposes only.  Also known as a property report, this report is a limited search of public records.  It does not provide any insurance. However, the title search does provide valuable information concerning the property such as the property’s most recent owner, taxes owed on the property, outstanding deed of trust, and possible liens. A
Read more