What is Lender Title Insurance?
If you are purchasing residential real estate, your Lender will require your lawyer or notary to order Lender Title Insurance for your new mortgage.
Lender Title Insurance insures the Lender’s interest in the property that you are purchasing for as long as the insured mortgage remains on the property. It is almost always required in residential real estate purchases in British Columbia.
Lender Title Insurance protects the Lender, but does not protect you as the Home Owner or Borrower. In particular, it protects the Lender against the following risks:
- Invalidity or unenforceability of the insured mortgage
- Someone other than the mortgagee owning an interest in the property
- Existing liens against the title taking priority over the insured mortgage
- Violations of municipal zoning by-laws
- Setback violations
- Outstanding municipal utility charges, provided such charges form a lien on title
- Existing work orders
- Lack of legal access to the property
- Unmarketability of the land due to adverse matters that would have been revealed by an up-to-date survey/real property report/building location certificate
- Fraud, forgery and false impersonation to the extent they affect the validity of the insured’s interest in title
- Forgery after the policy date of a discharge, assignment or postponement of the insured mortgage
How much does Lender Title Insurance cost?
Lender Title Insurance is paid by you, the Borrower. It is a one-time premium that will be collected by your lawyer or notary at the time the mortgage is registered. Costs will vary depending on the value of the mortgage being registered, and depending on the type of property you are purchasing. If your mortgage is under $1,000,000, for instance, title insurance is usually under $300.
Is Title Insurance just for Lenders?
No! If you are getting a mortgage, or are an existing homeowner, you can purchase Home Owner Title insurance. It is optional. If you have any questions about title insurance for your specific situation, we’d be happy to help. Contact Us.
Posted July 14, 2021.