Title insurance is protection against loss arising from problems concerning the title of your property. In Canada, First Canadian Title (FCT) is the company through which title insurance policies are insured through.
There are two different types of title insurance policies a “lender policy” and an “owner policy”.
Lender Title Insurance
When you take out a mortgage, the lender will require you to have title insurance policy for an amount equal to the mortgage loan. As with default mortgage insurance, it protects the lender but the borrower will pay the premium. This is a one time single payment made upfront at the time of the purchase or refinance, and is arranged through your lawyer. The coverage will continue for the life of the loan but once the loan is paid in full and released, the coverage under the policy will also stop.
Owner Title Insurance
For a one-time, very low cost premium-, an owner policy protects you for losses arising from title-related matters. It may cover you for issues that occurred in the past, such as problems related to renovations completed without a permit by previous owners. It will also protect you against real estate title fraud. It is advisable to do this as the additional cost above the lender policy is very small as your lawyer can order an owner policy at the same time as the lender policy. While there is no requirement for a buyer to obtain “owner title policy” the benefits may be something worth having especially as the fee is minimal.
When you work with a Mortgage Sister, you are working with a trusted mortgage advisor. We are here through your 1st purchase, to your retirement needs and everything else in between.