Mortgage Glossary
Title Insurance
Insurance that protects you (and your lender) against ownership disputes or defects in the property's title history.
What It Means
When you buy a home, you need to know that the seller actually has the legal right to sell it — and that no one else can later claim ownership. Title insurance protects against exactly that.
There are two types:
- Lender's title insurance: Required by most lenders; protects the lender's investment
- Owner's title insurance: Optional but highly recommended; protects your ownership
Title insurance covers things like:
- Previous undisclosed liens (money owed against the property)
- Forged deeds or signatures in the chain of title
- Errors in public records
- Undisclosed heirs claiming ownership
Unlike other insurance, it's a one-time premium paid at closing — not a recurring cost.
Real-World Example
"After closing, someone discovers that the previous owner had a contractor lien they never paid. Without title insurance, you could be responsible. With it, the insurance company handles it."
Watch Ryan explain this term
Related Terms
Ask Mia About This
Get personalized answers from your AI guide.
Browse All Terms
Back to the full mortgage glossary.
Work Hard Mortgage · NMLS #2396714 · Equal Housing Opportunity
Definitions are for educational purposes only and do not constitute financial or legal advice.