Lender's Title Insurance: Lender's title insurance protects your lender from problems with the title property, such as a legal claim against the home. You should consider purchasing owner's title insurance to protect yourself. You can find title insurance companies in NJ via http://www.clearskiestitle.com/.
Owner's Title Insurance: The owner's title insurance protects you against any problems with your deed or property ownership that may arise after you purchase a home.
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What is the difference between lenders' and owner title insurance?
When you apply for a mortgage, your lender will require you to purchase a lender's title insurance policy. This safeguards the amount lent if ownership of the property is contested.
If someone else claims ownership of the property and the claim is legally upheld, a lender's title insurance policy pays the lender the outstanding amount.
However, it does not safeguard you or your investment. If a claim to ownership arises, you will be required to pay legal fees. You could also lose the money you put down for your home and the subsequent mortgage payments.
Owner's title insurance becomes more valuable as you own your home for a longer period of time. As you pay down your mortgage, you own a larger percentage of your home and have more to lose. If you intend to stay in your home for a long time, you should consider purchasing an owner's title insurance policy.