In a purchase transaction, most lenders require the consumer to purchase a Lender’s title policy to protect the amount they lend from. However, this policy only protects the lender’s interest in the property. A consumer has the option to also purchase an Owner’s title policy, which is the only policy that provides protection for the homeowner should a title issue arise.
Adding an Owner’s policy to a Lender’s policy usually winds up costing the borrower only $50-$200 in addition to what a standalone Lender’s policy would have cost (though the breakdown gets complicated).
For refinance transactions, only a Lender’s policy is issued alongside the new mortgage, at about half the cost of a purchase transaction. This is because the Owner’s title policy covers the homeowner for as long as they or their heirs have an interest in the property.