The lender's policy is also known as a "loan policy" and is required for all transactions, purchases and refinances alike, since lenders must also protect against title related defects.
A lender wants to ensure that the loan they are issuing is protected by title insurance and their investment is covered. A lender's policy protects the mortgage holder (the institution that owns the mortgage).
If there is a fault in title that results in a loss, the mortgage holder will be paid back. You will need to order a new lender's policy to refinance your property.
READ MORE: Why lenders require title insurance
(minimum premium $100)
|Amount of Insurance||Cost Factor||Plus||On Amount Over|
|Up to $250k||$2.73/$1k||--||--|
|$250,001 to $500,000||$726.00||$2.59/$1k||$100k|
|$500,001 to $1 million||$1,400.00||$2.38/$1k||$500k|
|$1,000,001 to $5 million||$2,600.00||$1.58/$1k||$1 million|
|$5 million+||$7,600.00||$1.47/$1k||$5 million|
Note: When calculating the cost of a policy, please keep in mind we use a tiered rate. So if the loan is $600k and a lender's title policy is purchased, the cost is calculated by multiplying:
250 x $2.73 = $273.00
|Grand Total = $1,547.00|
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