|
Title insurance is usually required by
the lender to protect the lender against
loss resulting from claims by others
against your new home. In some states,
attorneys offer title insurance as part
of their services in examining title and
providing a title opinion. The
attorney's fee may include the title
insurance premium. In other states, a
title insurance company or title agent
directly provides the title insurance.
Owner's Policy.
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.
Choice of Title Insurer.
Under RESPA, 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.
Review Initial Title
Report. In
many areas, a few days or weeks before
the settlement or closing of the escrow,
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 to your attorney)
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.
Coverage & Cost
Savings. To
save money on title insurance, compare
rates among various title insurance
companies. Ask what services and
limitations on coverage are provided
under each policy so that you can decide
whether coverage purchased at a higher
rate may be better for your needs.
However, in many states, title insurance
premium rates are established by the
state and may not be negotiable. If you
are buying a home which has changed
hands within the last several years, ask
your title company about a "reissue
rate," which would be cheaper. If
you are buying a newly constructed home,
make certain your title insurance covers
claims by contractors. These claims are
known as "mechanics’ liens"
in some parts of the country.
Survey.
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
perimeter 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. Check with your lender or title
insurance company on whether an updated
survey is acceptable.
|
