Escrow & Title

In Maryland, a buyer's lender will require title insurance primarily to:

AProtect the buyer from physical property damage

BProtect the lender's security interest against title defects that could impair the mortgage✓ Correct

CGuarantee the purchase price

DEnsure the property taxes are current

Explanation

Lender's title insurance protects the lender's mortgage lien against title defects, ensuring the mortgage is enforceable and the lender's security interest is valid.

People Also Study

Key Terms to Know

Title Insurance

Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.

Lien

A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.

Private Mortgage Insurance (PMI)

Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.

Closing Costs

Fees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.

Math Concepts

Profit & Loss

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