Mortgage Loan Originator (MLO) Licensing Practice Test 2026 – Your All-in-One Guide to Exam Success!

A title commitment is an essential document in real estate transactions that outlines the terms under which a title insurance policy will be issued. It serves as a preliminary report, detailing the rights and obligations associated with the property's title and identifying any potential issues that could affect ownership. The title commitment typically includes information about the current state of the title, any outstanding liens or claims, and the conditions that must be met for the title insurance to be issued.

The mention of title insurance coverage is crucial since it protects buyers and lenders from potential financial loss due to defects in the title that were unknown at the time of the sale. This can include things like unpaid taxes, fraud, or other claims against the property that could jeopardize ownership rights.

In contrast, the other options do not align with the purpose of a title commitment. Loan specifics such as mortgage repayment schedules and buyer eligibility are more related to the financing aspects of a transaction rather than the title itself. Similarly, the sales price of the property pertains to the financial terms of a sale rather than the legal assurances provided by a title commitment. Thus, the correct answer correctly identifies the focus of a title commitment on outlining the terms of title insurance coverage.