If you are thinking of buying your own home, you will hear the words title insurance somewhere along the process. Many consumers are not exactly sure what this is.
For the most part, title insurance is almost always required by the lender. This insurance is used to protect the lender against loss resulting from legal claims by others against your new home. In some states, lawyers will offer title insurance as a portion of their services in examining the home's title and providing a title opinion as to whether it is clear or not. The attorney's fee may include the title insurance premium or in some cases it may not. In other states, a title insurance company or title agent directly provides the title insurance.
It is important for consumers to understand that the lender's title insurance policy does not protect the consumer. The same is true with the prior owner's policy; it does not protect you. When you need to protect yourself against claims by others against your new home, you will need what it is called an owner's policy. The truth is should a claim occur, it can be financially devastating to the homeowner who is uninsured.
It is good to keep in mind that if you buy an owner's policy, it is much less expensive if you buy it at the same time and with the same insurer as the lender's policy.
Consumers should also know that the home seller may not require, as a condition of the sale, for you to purchase title insurance from any particular title company. The mortgage lender will, however, require that the title insurance is from a company that is acceptable and reliable. As the homebuyer, you can choose a company that meets the lender's standards.
Generally speaking, a few weeks before the closing of the escrow, the title insurance company will issue what is called a "Commitment to Insure" or preliminary report or "binder" containing a summary of any defects in the title which have been identified during the title search. There may also be listed any exceptions from the title insurance policy's coverage. The commitment to insure is sent to the mortgage lender for use until the title insurance policy is issued at or after the closing.
If you wish, you may have a copy sent to you or to your lawyer, so that you can examine it and object if need be to the contents.
Consumers should compare rates between different title insurance companies. This can result in big savings. Make sure you ask about the services and limitations under each policy so that you can decide whether coverage purchased at a higher rate may be better for your needs.
In many states, title insurance premium rates are dictated by the state and those rates may not be negotiable. If you are buying a home which has changed hands within the last several years, ask your title company about a "reissue rate." This can be much less expensive.
When purchasing a brand new home, make sure that your title insurance covers claims by contractors. These claims are known as "mechanics' liens".
Mortgage lenders or title insurance companies will very often want a survey done in order to mark the boundaries of the property. A survey is simply a drawing of the property that details the perimeter boundaries and marks the location of the home and any other improvements that might be on the land.
You might be able to save some money if a past survey is available and no changes have been made to the property in the interim. You should check with your lender or title insurance company on whether an updated survey will be acceptable.
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Is a 125% HELOC still viable for people w/excellent credit scores and only a little equity in the house?
By: dygtolbert | 08-09-2008
My husband and I both have Excellent credit scores; we bought our 3rd house a year ago this month. I would like to get a HELOC with a 125% ltv. I want to consolidate debt and want a little extra for home improvements. I have already figured out we would save more than half on monthly debt payment, thereby increasing cash flow so I would be able to better use the HELOC to my advantage on my own terms. However, because of the current housing dilemma (which I think is at least half their fault) and because we have only had the house a year, we don't have enough equity. Are there any banks out there still willing to go on past financial history and current credit scores to give us this equity option? (I don't like to be denied because of the current market which is not our fault, and also be denied because we've only had the house for a year)...
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What Is The Difference From Yhe White Coffee Filters From The Non White Coffiee Filters?
I wont to buy land and put a house on it but ...
By: RaeKing85 | 08-09-2008
I wont to buy land and put a house on it but wonted to wait and see what the bail out does to the market is that smart?
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By: chikaakatsuki | 08-09-2008
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Closing costs
By: Gary | 08-09-2008
We make a good living with excellent credit scores but little in savings for closing costs. I know they just stopped the closing cost assistance program but is there any other way besides seller assist to pay for the closing costs?
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