Closings glossary
Lender's policy
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.
What does a lender's title policy cover?
Quick Answer
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.
Where does lender's policy come up in a New York City closing?
A $500,000 mortgage on a Bronx two-family carries a lender's policy for $500,000, while the buyer's owner's policy is written for the full price.
What else should you read before closing?
In the glossary
- Owner's policyTitle insurance protecting the buyer's ownership interest, issued for the purchase price with a single premium. Coverage continues while the insure...
- Title insuranceInsurance against loss from title defects that existed before the policy date. New York premiums come from a filed rate schedule, so the figure is ...
- 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-rela...
- Simultaneous issueIssuing 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 ...
- EndorsementAn 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 f...
Questions this raises
- What is the difference between an owner's policy and a lender's policy?An owner's policy insures the buyer for the purchase price. A lender's policy insures the bank for the loan amount. How the two differ on a New Yor...
- What amount is the lender's policy issued for?The lender's policy is written at the loan amount, at a simultaneous issue rate when an owner's policy is issued too. How changes before closing ar...
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