Humber/Ontario Real Estate Course 4 Exam Practice

What is typically comprised of loan policies and owner policies?

1. Registration law.

2. Title insurance.

3. Co-ownership deeds.

4. Mortgage policies.

The correct answer is: Title insurance.

The correct answer is title insurance, which plays a crucial role in real estate transactions. Title insurance provides protection to property owners and lenders against claims and defects in the title to a property. A loan policy, also known as a mortgagee's policy, protects the lender's financial interest in the property, ensuring that if any title issues arise, the lender is covered for their investment. On the other hand, an owner policy, or owner's title policy, protects the buyer's ownership interest in the property, providing a safeguard against potential disputes or claims against the title that could arise after the purchase is complete. Title insurance is essential because it addresses risks that may not be apparent through a standard title search, such as undiscovered liens, fraud, or other title defects. This comprehensive coverage makes title insurance a vital component of real estate transactions, ensuring that both owners and lenders are protected against unforeseen issues related to property ownership.