Tuesday, August 7, 2018

How Title Insurance Protects All Homebuyers


Whether you’re purchasing a new or existing home, or refinancing, title insurance protects you against any problems affecting the title to your home.

The Basics

There are two types of title insurance: the owner’s policy and the lender’s policy. The owner’s policy protects your property rights as the homebuyer, whereas the lender’s policy insures the financial investment of the bank or lender. If someone else claims ownership of your property, title insurance typically defends you legally and financially.

Common Risks

Here are some examples of problems with title:

·        Liens against the property that serve as security for the payment of an obligation (e.g. mortgage liens, judgment liens for unpaid court judgments, federal tax liens, state and local liens for failure to pay real estate taxes or assessments, mechanic’s liens to secure payment for property improvements, liens for recovery of child support payments or, as in New York City, for unpaid parking tickets).
·        Easements that have been created by contract or arisen through use or adverse prescription (e.g. rights of way for utilities, rights acquired by neighbors because of a fence encroachment).
·        Building or use restrictions contained in recorded plats, agreements or deeds.
·        Claims arising out of bankruptcy.

These are just some of the many reasons why getting owner’s title insurance is crucial when buying or refinancing a home. It gives you peace of mind that your property rights are protected.

Refinancing?

When you refinance, you are obtaining a new loan, even if you stay with your original lender. Lenders will usually require a new title search and lender’s policy to protect their investment in the property. Fortunately, homeowners don’t need to purchase a new owner's policy—the one you bought at closing is good for as long as you or your family own the property. However, you may want to contact an ALTA member to update your policy to reflect changes in your life.  

 

Enduring Value

Owner’s title insurance is a low, one-time fee based on the value of your home. For example, the typical owner’s title insurance policy costs an average of 0.5% of a home’s purchase price. With a home being one of the largest investments you’ll ever make, it’s clear why getting owner’s title insurance is such a smart way to give yourself peace of mind.

More Homebuyer Tips & Information

The American Land Title Association helps educate homebuyers like you about title insurance so you can protect your property rights. Check out www.homeclosing101.org to learn more about title insurance and the home closing process.


*This advertising offers a brief description of insurance coverages, products and services and is meant for informational purposes only. Actual coverages may vary by state, company or locality. You may not be eligible for all of the insurance products, coverages or services described in this advertising. For exact terms, conditions, exclusions, and limitations, please contact a title insurance company authorized to do business in your location.

Monday, July 23, 2018

The FAQs of Title Insurance for Homebuyers


For most of us, a home is the largest investment we’ll make in our lives. To buy with confidence, get owner’s title insurance. It’s the smart way to protect your property from legal claims. To help you understand how owner’s title insurance works, here are answers to common questions.

What is title?

Title is your right to own or use your property. Title also establishes any limitations on those rights.


What is a title search?

A title search is an early step in the homebuying process to uncover issues that could limit your rights to the property. If a title issue is discovered, most often your title professional will take care of it without you even knowing. After the title search is complete, the title company can provide a title insurance policy.

What is title insurance?

If you’re buying a home, title insurance is a policy that protects your investment and property rights.

There are two different types of title insurance: an owner’s policy and a lender’s policy.

1.     An owner’s policy is the best way to protect your property rights. Either the buyer or seller may pay for this policy. Ask your title professional how it’s handled in your area.

2.     A lender’s policy is usually required by the lender and only protects the lender’s financial interests. The buyer typically pays for this policy, but that varies depending on geography. Ask your title professional how it’s handled in your area.

Why should I purchase owner’s title insurance?

Owner’s title insurance protects your investment in your property from certain future legal claims regarding ownership of your property. For a one-time fee, you and your heirs* receive coverage for as long as you own your home. The owner’s policy also covers potential legal fees and court costs for settling claims covered by your policy.  

What does owner’s title insurance cover?

Sometimes undiscoverable defects can come up after the title search. Under an owner’s title insurance policy, you are protected against certain undiscovered errors in the title.

Title issues include unknown:
·        Outstanding mortgages and judgments, or a lien against the property because the seller has not paid his taxes
·        Pending legal action against the property that could affect you
·        Unknown heir of a previous owner who is claiming ownership of the property

Unforeseeable title claims include:
·        Forgery: making a false document
       For example, the seller misrepresents the identity of the person who sold the property.
·        Fraud: deception to achieve unfair gain
       For example, someone steals your identity and either sells your house without your knowledge or consent, or takes out a second mortgage on the property and walks away with the money.
·        Clerical error: inconsistent paperwork and historical records
       For example, an unforeseeable discrepancy in the property or fence line can cause confusion in ownership rights.

What does owner’s title insurance cost?

The one-time payment for owner’s title insurance is low relative to the value of your home. A typical title insurance policy costs around 0.5% of the home’s purchase price.

How long am I covered?

Your owner’s insurance policy lasts for as long as you or your heirs* own your property. Your life will change over time, but your peace of mind never will.

What happens at closing?

Closing is the final step in executing the homebuying transaction. It is the process that allows the transfer of ownership to occur. Upon completion of the closing process, you get the keys to your home!

Where can I get more information?

The American Land Title Association helps educate homebuyers like you about title insurance so you can protect your property rights. Check out www.homeclosing101.org to learn more about title insurance and the home closing process.


*This advertising offers a brief description of insurance coverages, products and services and is meant for informational purposes only. Actual coverages may vary by state, company or locality. You may not be eligible for all of the insurance products, coverages or services described in this advertising. For exact terms, conditions, exclusions, and limitations, please contact a title insurance company authorized to do business in your location.

Tuesday, July 10, 2018

Closing Time: 6 Steps Every Homebuyer Should Expect


Get owner’s title insurance and buy your home with confidence

Your long home-buying journey is almost over. You found the home you love, the seller agreed to your offer and now it’s time for closing. Of course, there’s a lot to think about right now, and the last thing you want is something­ to go wrong. So make sure you work with an experienced closing agent to help ensure the details come together and everything runs smoothly.

As soon as the seller accepts your offer, the behind-the-scenes work begins. You can expect closing to happen within 30 to 90 days.

1.    Select a Closing Agent

If you are working with a real estate agent, with your permission, he or she may place an order with a closing agent as soon as your sales contract is accepted. The closing agent can be a title company, an escrow company or a settlement company.

Most homebuyers rely on their real estate agent to select a closing agent—someone they work with regularly and know to be professional, reliable and efficient. However, you can choose your own closing agent if you wish. The closing agent will oversee the closing process and make sure everything happens in the right order and on time, without unnecessary delays or glitches.

2.    Draw up an Escrow Agreement

First, a contract or escrow agreement is drafted, which the closing agent reviews for completeness and accuracy. The agent will also put your deposit into an escrow account, where the funds will remain until closing.

3.    Title Search is Conducted

Once the title order is placed, the title company conducts a search of the public records. This should identify any issues with the title such as liens against the property, utility easements, and so on.  If a problem is discovered, most often the title professional will take care of it without you even knowing about it. After the title search is complete, the title company can provide a title insurance policy.



4.    Shop for Title Insurance

There are two kinds of title insurance coverage: a Lender’s policy, which covers the lender for the amount of the mortgage loan; and an Owner’s policy, which covers the homebuyer for the amount of the purchase price. If you are obtaining a loan, the bank or lender will typically require that you purchase a Lender’s policy. However, it only protects the lender.

It is always recommended that you obtain an Owner’s policy to protect your investment. The party that pays for the Owner’s policy varies from state to state, so ask your settlement agent for guidance before closing.

5.    Obtain a Closing Disclosure

Your lender must provide a Closing Disclosure to you at least three days prior to closing. Your lender may also have a closing agent provide the Closing Disclosure to you three days before you close your transaction.

If you or your lender makes certain significant changes between the time the Closing Disclosure form is given to you and the closing, you must be provided a new form and an additional three-business-day waiting period after receipt of the new form. This applies if the creditor:
·        Makes changes to the APR above ⅛ of a percent for most loans (and ¼ of a percent for loans with irregular payments or periods)
·        Changes the loan product
·        Adds a prepayment penalty to the loan

If the changes are less significant, they can be disclosed on a revised Closing Disclosure form provided to you at or before closing, without delaying the closing.

6.    The Finish Line: Prepare for Closing

As closing day approaches, the closing agent orders any updated information that may be required. Once the closing agent confirms with the lender and the seller, he or she will set a final date, time and location of the closing.
On closing day, all of the behind-the-scenes work is complete. While you’ve been busy packing, ordering utilities and coordinating the movers, your closing agent has been managing the closing process so that you can rest assured, knowing all the paperwork is in order.



More Homebuyer Tips & Information

The American Land Title Association helps educate homebuyers like you about title insurance so you can protect your property rights. Check out www.homeclosing101.org to learn more about title insurance and the home closing process.


This advertising offers a brief description of insurance coverages, products and services and is meant for informational purposes only. Actual coverages may vary by state, company or locality. You may not be eligible for all of the insurance products, coverages or services described in this advertising. For exact terms, conditions, exclusions, and limitations, please contact a title insurance company authorized to do business in your location.

Tuesday, June 19, 2018

7 Reasons Why Every Homebuyer Needs Owner’s Title Insurance


Buying a home is an exciting and emotional time for many people. To help you buy your home with more confidence, make sure you get owner’s title insurance. Here’s why it’s so important for you.

 

1.    Protects Your Largest Investment

A home is probably the single largest investment you’ll make in your life. You insure everything else that’s valuable to you—your life, car, personal property, health, pets, jewelry, etc.—so why not your largest investment? For a one-time fee, owner’s title insurance protects your property rights for as long as you or your heirs* own the home.

2.    Reduces Your Risk

If you’re buying a home, there are many hidden issues that may pop up after purchasing it. Getting an owner’s title insurance policy protects you from legal title discrepancies. Don’t think it will happen to you? Think again. Here are just some of the many situations that you’ll be protected from if you have owner’s title insurance.

Unforeseeable title claims, such as:
·        Forgery: making a false document
       For example, the seller misrepresents the identity of the person selling the property.
·        Fraud: deception to achieve unfair gain
       For example, someone steals your identity and either sells your house without your knowledge or consent, or takes out a second mortgage on the property and walks away with the money.
·        Clerical error: inconsistent paperwork and historical records
       For example, an unforeseeable discrepancy in the property or fence line causes confusion in ownership rights.

Unexpected title claims, such as:
·        Outstanding mortgages and judgments, or liens against the property because the seller didn’t pay required taxes
·        Pending legal action against the property that could affect your ownership
·        An unknown heir of a previous owner who is claiming ownership of the property

3.    You Can’t Beat the Value

Owner’s title insurance is a one-time fee that’s very low relative to the value it provides. It typically costs around 0.5% of a home’s purchase price.

4.    Covers Your Heirs*

As long as you or your heirs* own your home, owner’s title insurance protects your property rights.

5.    Nothing Compares

Home insurance and warranties protect only the inside of the home. Getting owner’s title insurance ensures your family’s property rights stay protected.

6.    8 in 10 Homebuyers Agree

Each year, more than 80% of America’s homebuyers choose to get owner’s title insurance.

7.    Peace of Mind

If you’re buying a home, owner’s title insurance lets you rest assured, with the knowledge that you won’t be stuck with certain existing debts or legal problems once you’ve closed on your new home.

More Homebuyer Tips & Information

The American Land Title Association helps educate homebuyers like you about title insurance so you can protect your property rights. Check out www.homeclosing101.org to learn more about title insurance and the home closing process.

*This advertising offers a brief description of insurance coverages, products and services and is meant for informational purposes only. Actual coverages may vary by state, company or locality. You may not be eligible for all of the insurance products, coverages or services described in this advertising. For exact terms, conditions, exclusions, and limitations, please contact a title insurance company authorized to do business in your location.