When purchasing residential property, what do most lenders require?

When purchasing residential property, most lenders require a general warranty deed accompanied by a paid-up title insurance policy. The general warranty deed is significant because it provides the highest level of protection to the buyer. It guarantees that the seller holds clear title to the property and has the right to transfer ownership, as well as protecting the buyer against any potential claims or encumbrances on the property that may arise from previous ownership.

The paid-up title insurance policy serves as a safeguard for the lender and the buyer. It protects against any title defects or claims that could result in financial loss after the purchase is complete. Title insurance ensures that the property title is free from liens or disputes, and it provides coverage for legal fees in case of any title-related issues that emerge after the transaction.

In this context, while other options may involve different types of deeds or documents, they do not offer the comprehensive assurance and protections that the general warranty deed and title insurance provide, which is why the correct answer centers on this combination.