How Can Title Insurance Help You and Your Family
Title insurance, also known as an owner's policy is an insurance policy that protects real estate from loss as a result of a legal dispute or title defect. While a title search usually spots whether or not the home is the seller's to sell, they are not infallible and rarely turn up other issues. For example, if a previo0us owner still has claim to the property, they could file a lawsuit and have the new ''owner'' evicted. Even third party individuals from the house's past, such as unpaid contractors, could take out a lawsuit against the property.
Title insurance protects the seller as well. Title insurance that protects the lender will always be included in the closing costs, paid for by the buyer. The buyer must verify that the coverage is also owner's insurance, (It is in many areas) if not, It is necessary to get one on your own. If not, and you only pay the lender's title insurance, it is not strictly required that you posses an owner's policy, but you expose yourself to significant loss if there is a party with any legal claim against the property, or are owed debts by previous owners of the property for any work, repairs, or improvements.
The lenders Policy that is included in the buyer's closing costs will cover the entire amount owed the lender. If an owner's policy is included with the lenders policy, if covers the amount the buyer has paid, including down payment. If you are purchasing an owner's policy individually, It should cover all the funds you have put into the home.
It is generally purchased as a onetime fee and lasts as long as the buyer and his or her descendants have an interest in the policy. The industry formula for calculating title insurance is fairly simple. Take the purchase price, divide it by 1,000, and then multiply it by the insurer's rate. For example, $100,000/$1,000 = $100(5.75) = $575.00
It is usually included as part of the closing costs and in the United States typically costs between $500 and $3,000. So if you plan to live in the house for 30 years, which comes out to a maximum of $9 per month. The industry formula for calculating title insurance is fairly simple. Take the purchase price, divide it by 1,000, and then multiply it by the insurer's rate. For example, $100,000/$1,000 = $100(5.75) = $575.00
An owner's policy protects many things. Say for example the seller did not have proper title and a previous owner wins the house in a lawsuit, you are covered for all your investment in the house. Also, say a former contractor or technician wins a claim of monies owed for work done for a previous owner; the owner's policy would cover it. So, even though it is not strictly necessary, it provides a high level of protection for a very low cost.
Title insurance protects the seller as well. Title insurance that protects the lender will always be included in the closing costs, paid for by the buyer. The buyer must verify that the coverage is also owner's insurance, (It is in many areas) if not, It is necessary to get one on your own. If not, and you only pay the lender's title insurance, it is not strictly required that you posses an owner's policy, but you expose yourself to significant loss if there is a party with any legal claim against the property, or are owed debts by previous owners of the property for any work, repairs, or improvements.
The lenders Policy that is included in the buyer's closing costs will cover the entire amount owed the lender. If an owner's policy is included with the lenders policy, if covers the amount the buyer has paid, including down payment. If you are purchasing an owner's policy individually, It should cover all the funds you have put into the home.
It is generally purchased as a onetime fee and lasts as long as the buyer and his or her descendants have an interest in the policy. The industry formula for calculating title insurance is fairly simple. Take the purchase price, divide it by 1,000, and then multiply it by the insurer's rate. For example, $100,000/$1,000 = $100(5.75) = $575.00
It is usually included as part of the closing costs and in the United States typically costs between $500 and $3,000. So if you plan to live in the house for 30 years, which comes out to a maximum of $9 per month. The industry formula for calculating title insurance is fairly simple. Take the purchase price, divide it by 1,000, and then multiply it by the insurer's rate. For example, $100,000/$1,000 = $100(5.75) = $575.00
An owner's policy protects many things. Say for example the seller did not have proper title and a previous owner wins the house in a lawsuit, you are covered for all your investment in the house. Also, say a former contractor or technician wins a claim of monies owed for work done for a previous owner; the owner's policy would cover it. So, even though it is not strictly necessary, it provides a high level of protection for a very low cost.
posted by Vittoria @ August 14, 2011
0 Comments
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home