Lenders Title Insurance

Lender's title insurance is a buyer closing cost during escrow. Lenders require borrows to purchase lenders title insurance in order to receive the loan

What is Lenders Title Insurance?

Lender’s Title Insurance is a form of Title Insurance for buyers who are getting a loan. The lender requires buyers getting loans to buy Lender’s title insurance as part of the loan. Much like PMI, this insurance doesn’t have any direct benefit to the buyer.

Who pays for Lenders Title Insurance?

Lenders title insurance is typically a buyer-side closing cost

How much does Lenders Title Insurance Cost?

 Lenders title insurance fee less than Title Insurance – it is about 1/3 the cost of Title Insurance. The cost of the Lender’s title insurance depends on the buyer’s loan amount (not the purchase price). The larger the loan amount, the larger the lenders title insurance premium. I personally calculate Lender title insurance using a title company rate sheet. 

 Typically Lenders Title Insurance costs between $500 (500K loan) -$1,500 (2.5M loan) depending on the size of the loan. For a 10M loan lender title insurance might be as much as $3,000 – that is about as high as it goes. 

Like Title Insurance, with Lenders Title Insurance you only pay the premium once and it is good for the life of the loan. You do need to pay for Lenders title insurance again if you refinance because that is a new loan. 

Who chooses the Lenders Title Insurance Company?

The company that is doing the Title Insurance typically does the Lenders Title Insurance as well. The seller customarily chooses the Title Insurance Company. 


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