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TITLE INSURANCE
Title insurance is usually required by the lender to protect the lender against
loss resulting from claims by others against your new home.
A lender's title insurance policy does not protect you. Similarly, the prior
owner's policy does not protect you. If you want to protect yourself from claims
by others against your new home, you will need an owner's policy. When a claim
does occur, it can be financially devastating to an owner who is uninsured. If
you buy an owner's policy, it is usually much less expensive if you buy it at
the same time and with the same insurer as the lender's policy.
Under RESPA (to see more info click here
http://www.hud.gov/offices/hsg/sfh/res/respamor.cfm) , the seller may not require you, as a condition of the sale, to
purchase title insurance from any particular title company. Generally, your
lender will require title insurance from a company that is acceptable to it. In
most cases you can shop for and choose a company that meets the lender's
standards.
The title insurance company will issue a commitment to insure or preliminary
report or binder containing a summary of any defects in title which have been
identified by the title search, as well as any exceptions from the title
insurance policy's coverage. The commitment is usually sent to the lender for
use until the title insurance policy is issued at or after the settlement. You
can arrange to have a copy sent to you (or your buyers agent) so that you can
object if there are matters affecting the title which you did not agree to
accept when you signed the agreement of sale.
In many states title insurance premium rates are established by the state and
may not be negotiable. If you are refinancing ask your title company about a
reissue rate. If you are buying a newly constructed home, make certain your
title insurance covers claims by contractors.
Lenders or title insurance companies often require a survey to mark the
boundaries of the property. A survey is a drawing of the property showing the
boundaries and marking the location of the house and other improvements. You may
be able to avoid the cost of a complete survey if you can locate the person who
previously surveyed the property and request an update.
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Real Estate Services Today, Inc.
