What Is Mortgage Title Insurance and Why It Matters
When purchasing a home or commercial property, protecting your investment is essential. One often overlooked but critical protection is mortgage title insurance . This type of insurance safeguards lenders by ensuring the mortgage loan is backed by a clear title to the property. Understanding how mortgage title insurance works can help buyers and lenders avoid costly disputes and financial loss. What Is Mortgage Title Insurance? Mortgage title insurance, also known as lender’s title insurance, protects the mortgage lender’s interest in a property. When a lender provides a mortgage loan, they want assurance that the title to the property is free from defects that could jeopardize their ability to foreclose if necessary. Unlike homeowners’ title insurance, which protects the buyer, mortgage title insurance only covers the lender up to the amount of the mortgage loan. This insurance protects against issues such as: Prior liens or claims on the property Ownership disputes F...