Sometimes buyers confuse Lenders Title Insurance with Title Insurance. They are different. Title insurance ensures that you as the buyer have free and clear title and is customarily paid by the seller. A Lender’s title insurance policy only protects the lender and is a buyer closing cost expense.
Lender’s require buyers to purchase a lenders title insurance policy prior to funding a loan. Much like PMI, this insurance has no benefit to the buyer. The Lenders title insurance cost is based on the dollar amount of the loan- not the purchase price and can be calculated with a lenders title insurance rate sheet. Typically Lenders Title Insurance costs between $500-$1,500 depending on the size of the loan.