Lender's policy

The full definition

Title insurance protecting a lender's lien position, issued in the loan amount. Its coverage falls as the principal balance falls and ends when the loan is paid off.

Also called: Loan policy.

Which related terms should you know?

These are the terms that come up alongside lender's policy in the same file.

Owner's policy

Title insurance protecting the buyer's ownership interest, issued for the purchase price with a single premium. Coverage continues while the insured or their heirs own the property.

Title insurance

Insurance against loss from title defects that existed before the policy date. New York premiums come from a filed rate schedule, so the figure is calculated rather than negotiated.

Premium (title insurance)

The one-time charge for a title policy, computed from the filed New York rate schedule by amount of insurance, plus any endorsement and search-related charges.

Simultaneous issue

Issuing an owner's policy and a lender's policy together on one transaction, which reduces the charge for the loan policy under the filed New York rate schedule.

Endorsement

An add-on that modifies a title policy's coverage for a defined risk. Endorsement charges come from the filed New York rate structure rather than from negotiation.

What else should you read before closing?