Title Insurance: Lender vs. Owner

Title insurance and escrow services can be a complicated subject. In this week's blog, Cambridge Title Company is diving into whether or not you need seperate title insurance from your mortgage lender.

When it comes to title insurance, a lender's policy only covers the amount of the mortgage loan, which usually isn't the full value of your property.

If someone were to follow a lien against your property, the lender would be protected due to lender's title insurance. Because of this, the lender would be indifferent to the claim unless it threatened their ability to foreclose on your property. This would ultimately prevent them from recovering their principal value with interest.

Additionally, lender's title insurance wouldn't protect you against incurred legal expenses paid out to protect your right to the property. This is where owner's title insurance comes into play. With this form of title insurance, your legal expenses would be covered. Should you lose the right to the property you would have paid a fraction of the otherwise cost.

For more information on title insurance and escrow services, contact Cambridge Title Company by phone at 224-330-1886 or by email at info@cambridgetitleco.com.