California Real Estate Practice Exam

Who generally pays the premium for the title insurance insuring the lender?

1. Buyer

2. Seller

3. Lender

4. Escrow agent

The correct answer is: Buyer

Title insurance is meant to protect both the lender and the buyer in case there are any issues with the title of the property. However, the lender's policy is typically paid for by the buyer as it is a requirement for obtaining a mortgage. Option B is incorrect because the seller is not typically responsible for paying for the lender's policy. They may choose to pay for the buyer's policy, but it is not required or expected. Option C is incorrect because while the lender is the one being insured, they do not typically pay for the policy themselves. It is ultimately the buyer's responsibility to ensure the lender is protected. Option D is incorrect because the escrow agent's role is to facilitate the closing of the sale and they are not responsible for paying for title insurance.