Mortgage glossary
Title insurance
Definition: Title insurance protects the lender and, if purchased, the homeowner against financial loss from defects in a property's ownership history, such as liens, recording errors, or undisclosed heirs.
The title company searches public records before closing and resolves problems it finds. A lender's policy is required on nearly every mortgage and protects the loan amount. An owner's policy protects the buyer's equity for as long as they or their heirs own the home. Both are paid once at closing.
In Texas, title insurance premiums are set by the Texas Department of Insurance, so the base premium for a given policy amount is the same across title companies. By local custom, sellers often pay for the buyer's owner's policy, though that is negotiable in the contract.
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Reviewed by Kyle Richardson, NMLS #863464. General information, not advice for your specific situation. All glossary terms
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