Title Insurance = Peace of Mind

Purchasing a home is probably the single biggest investment you will ever make. Before closing on the house, you’ll want to know that no other individual or entity has a right, lien or claim to the property.

Determining that your rights and interests to the property are clear is the business of a title insurance company.

For a modest, one-time title insurance premium, you will receive continuous title insurance protection in an amount equal to the purchase price of the property or its current market value. This premium typically includes your “owners” policy as well as the “lenders” policy.

One of the marked advantages of title insurance is that prior to a policy being issued, the title insurance company completes extensive research into relevant public records, maps and documents to trace ownership of the property and determine if anyone other than you has an interest in the property. Through its research, the title insurance company can usually identify any title problems that may arise and have these problems cleared-up prior to closing.

Your title insurance owner’s policy will describe the property and outline any recorded limitations on your ownership. It will also set forth the title insurance company’s responsibilities should any claim covered by the policy terms arise. Typically your title insurance will protect you from loss:

if someone contests your title in legal action (the title insurance company will defend the title at no expense to you),

or if there is a title defect that cannot be eliminated (the title insurance company will protect you from financial loss – up to the amount of the policy).

Copyright © 2009 Front Street Mortgage Consultants
Portions Copyright © 2009 a la mode, inc.

Regardless of the causes, most areas around the country are experiencing what is commonly referred to as a “buyer’s market.”  That term might make sellers squirm, but for those purchasing a home, lower prices are just the starting point for negotiation these days.

During the recent “boom” years, buyers often accepted a property “as is,” and asked for few concessions, even forgoing inspections and appraisals in an attempt to avoid being dumped for the next qualified buyer in the queue.  Now, however, buyers are in the drivers seat and they know it, insisting on a variety of terms in their offers.

The most popular demand now seems to be the “home warranty,” whereby the seller purchases a one-year service contract to cover any unexpected system and/or appliance repairs.  Of course, this is on top of insisting that sellers pay for all needed repairs exposed by an inspection before closing, or at least an allowance paid to the buyers to cover the expenses.

Just one inspector doesn’t seem to be enough, either.  Now buyers are looking more closely at lead and radon levels, roofs and foundations, and looking into inspectors who specialize in these areas.  Sellers find they need to be more flexible, or the buyers will simply move on to the next seller in the queue.  Now is the time to boost your purchase power.

When one hears the word “foreclosure,” images are conjured of families unable to meet their loan commitments, and forced to consider unpleasant options.  However, it’s not only homeowners that suffer from a foreclosure.  Renters can be “out on the street” if their landlord defaults on mortgage payments.

A report from the Mortgage Bankers Association states that nearly 20% of recent foreclosures have been against investors who did not live in the property, and even tenants in good standing face having to vacate the premises if they’re renting one of these properties.

Why mention this gloom and doom scenario?  Because home values have declined, and buyers are seeing the best deals in many years.  While unpleasant for sellers, price declines increase affordability for buyers, so if you’ve been renting, now is a fantastic time to turn that monthly payment into equity.

Interest rates have inched up, but still-historically low rates combined with very affordable housing yield a formula that should put you in a home that you own for the same amount you are now paying for rent.  Not to mention that at a lower purchase price, you’ll enjoy some great appreciation over the coming years.

Just because you’re renting now, you’re not necessarily safe from suffering the consequences of a foreclosure.   Take matters into your own hands and buy yourself some peace of mind.