What’s involved in buying or refinancing?
When you start the process of buying or refinancing a home there are a lot of things you need to consider. Most likely, title insurance isn’t one of them, but that is why we are here to help you. Below you will find a list of questions to guide you along through the process.
What to consider for title insurance
When it comes to title insurance it involves two parts. According to Jeremy Yohe a spokesperson for the Washington, D.C.-based American Land Title Association, you need to have the title insurance company or attorney search property records to make sure there haven’t been any clerical errors, mistakes in examining records, undisclosed heirs, omissions in deeds, unknown liens or fraud involving the deed.
Next, the title company or attorney performing the search needs to contract with an underwriting company to issue an Owner’s Title Insurance Policy that will help defend you in court if anyone tries to challenge your title and be able to obtain compensation for your equity if you end up losing the battle in court. A Loan Title Insurance Policy will only protect the lender.
Below you will find a list of questions that will help when it comes time for you to buy or refinance a home.
Questions to ask when buying or refinancing
Are title insurance prices regulated?
First, you need to find out if the title insurance prices are regulated. In most states you will find that they are regulated, so there won’t be much of a price difference between companies. Consumers should be taking into consideration: the quality of insurance and of the title search. According to Ronald Mann, a law professor at Columbia University in New York, “The goal is to find a title company or attorney that will do a thorough search and an underwriter that will be there in 10 or 15 years if there’s a problem.” You may find in areas that don’t have regulated pricing, the difference in price could be about 10-20 percent more. In order to find out if you are in a regulated area , you can ask your lender or state insurance department.
What coverage do I need?
Secondly, you need to make sure you ask what coverage do I need? When it comes to the average policy they are pretty basic. An average policy typically protects against a number of contingencies, like fraud, forgery, spousal claims, etc. If a consumer would want additional coverage, that could cause an increase in the insurance cost.
Third, who usually pays? Buyers and sellers are the two parties responsible for paying for the two policies, but it does vary from state to state and even sometimes from county to county. In some states the buyer may pay one policy while the seller pays for the other.
Who do I trust?
Lastly, who do I trust? Going through the process of buying a home everyone is trying to give you advice: the seller, your real estate agent and your mortgage lender. When it comes to trusting look to your realtor for a personal recommendation or the Internet for reviews of local title insurance companies. Google business reviews is a great place to start.
In conclusion , when you decide to buy or refinance your home make sure to keep title insurance on your mind and use these questions when looking.