What’s the difference between an Owner’s Title Policy and a Mortgagee’s Title Policy?
An Owner’s Title Policy (OTP) is a policy that protects the buyer of a property against any insurable unknown debt, lien or encumbrance that may arise after the buyer purchases his/her property. The policy has a face dollar amount (usually the purchase price) and may be increased at anytime during the ownership of that property by that party only. There will be an additional premium charged to increase the policy amount. However, the insured amount of the OTP is good for as long as the buyer owns his/her new home and the vested owner has not changed. This OTP premium is paid only once at the time of purchase and is good for the life of the ownership interest. The original OTP will not increase in value unless an additional premium is paid. The Mortgagee’s Title Policy (MTP) is similar to the OTP, except it’s purpose is to protect the lender(s) who made the loan(s) on the property. Anytime the owner of a property refinances their property this MTP will expire and a new policy will have
