Lender’s Title Policy vs. Owner’s Title Policy: What’s the Difference and Why You Need Both
When buying a home, title insurance is one of those behind-the-scenes protections you don’t want to overlook. But here’s where many buyers get confused: What’s the difference between a lender’s title policy and an owner’s title policy? Do you really need both?
At Legacy Title Agency, we’re here to break it down in simple, stress-free terms—because understanding your title insurance should never feel like reading legalese.
What Is Title Insurance, Anyway?
Title insurance protects against problems with your property’s title—like unknown liens, undisclosed heirs, recording errors, or fraud—that could come back to haunt you after closing. It’s a one-time cost that gives long-term peace of mind.
Now let’s talk about the two types of title insurance policies.
Lender’s Title Policy
A lender’s title policy, sometimes called a loan policy, is required by most mortgage lenders. It protects the lender’s interest in the property until the loan is paid off.
💡 Important note: This policy does not protect you, the buyer.
Even though you’re paying for it (in most cases), it only covers the amount of the loan—not your equity—and it only benefits the lender.
Owner’s Title Policy
An owner’s title policy is an optional but highly recommended policy that protects you, the homeowner.
It covers your legal rights to the property and shields you from financial loss due to title issues that weren’t addressed or discovered during the title search—even if those issues surface years later.
Some examples of covered risks:
Undiscovered liens from previous owners
Forged signatures on past deeds
Unknown heirs claiming ownership
Errors in public records
Best part? It’s a one-time cost at closing and protects you for as long as you own the home.
Why You Should Always Choose Both
Even though the lender’s title policy is required, it’s the owner’s policy that protects your investment. Skipping it could leave you vulnerable to legal battles and financial loss if a title issue pops up after closing.
At Legacy Title Agency, we’ve seen firsthand how an owner’s policy can save homeowners from costly legal headaches. We believe every buyer deserves to close with confidence, which is why we take the time to explain your options and make sure you’re fully protected.
Why Choose Legacy Title Agency?
We’re not just a title company—we’re your peace-of-mind partner.
Located in Michigan, Legacy Title Agency brings years of experience, local expertise, and friendly service to every transaction. Whether you’re buying your first home or your forever home, we’ll guide you through every step of the closing process with transparency and care.
✅ Thorough title searches
✅ Clear explanations of lender and owner policies
✅ Fast, accurate closings
✅ Competitive pricing
Still Have Questions About Title Insurance?
We’re happy to help! Contact Legacy Title Agency today or visit www.legacyclosings.com to learn more about protecting your real estate investment with the right title insurance.