SCHUTT LAW FIRM, P.A.
Phone: 239.540.7007
Title Insurance
07/07/2016

Essential Advice When Buying Your First Home

Buying your first home is a big step to take in life. You have probably had an idea of your dream property for many years, and you’ve finally found it! You may have had to scrimp and save hard to get your deposit together, and it may have been a long and stressful process to get to the point where you are ready to make an offer for you dream home. So, after all of that hard work and emotional energy that you have invested, you certainly wouldn’t want anything to go wrong that could result in the sale not going through, or even worse, losing the property in the future due to defects in its Title history. In this blog post, the experts at Schutt Law Firm, P.A. have put together a great guide with essential advice to follow when buying your first home.

Look Carefully At Your Finances and Make Sure that Everything Is In Order

To get the best deal on your mortgage, it’s important to have saved a significant percentage of the property’s value to put down as a deposit. As a guideline, you will need to have saved between 5 and 20%. Before attempting to put in an offer, it’s important that you have had your mortgage approved by your bank or other lending agency. This is because if you do not have the funds ready and guaranteed, there is a chance that you could lose out on the sale to another buyer who is ready to move the process along more quickly and has all the necessary paperwork ready. Another important factor to consider is how much your monthly mortgage payments will add up to, and if you will be able to afford them for the entire duration of the loan period. Mortgage payments are made up of 4 main costs – Principal, Interests, Taxes and Insurance (PITI). So, on top of paying off the actual cost of the property, you will need to account for interest and taxes and insurance such as property tax and homeowners insurance. You should consider what you would do if interest rates were to rise, or your employment situation was to change to ensure that you would still be able to make your monthly payments. Speak to your financial or mortgage adviser for expert advice. Title insurance is an important safeguard against any future disputes to homeownership rights. You can only purchase title insurance before closing. Call Schutt Law Firm, P.A. today at 239 540 7007 to find out more about how to protect your home with title insurance in Cypress Lake.

Consider Other Costs and Budget Accordingly

As well as your deposit and monthly mortgage payments, there are some upfront costs that you need to consider when buying a home. There are costs associated with the home-buying process, such as Real Estate Agent’s fees, Escrow fees, Solicitors fees, and the costs of conducting an independent appraisal as well as many others. On top of this, you need to take into consideration the costs of furnishing and redecorating the property to your tastes. Most Real Estate Agents suggest adding around 5 – 10% of the total cost of your home to your budget to cover upfront costs for fees and redecorations. If you don't end up using the additional funds, it can be a great way to put your mortgage payment ahead or make a few small changes to your property that you were not previously able to.

Protect Your Ownership

Title Insurance is an important safeguard when buying any property. Did you know that without title insurance, you could face problems with the ownership rights to your home, due to someone else’s historical error? Before completing the home-buying process, you should speak to a title insurance agency and ask them to conduct a detailed title search on the property. In a Title Search, specially trained agents investigate the historical rights to the property and identify any errors that they must rectify before that sale can go through. Research has found that as many as one in four title searches reveal a serious issue with the property’s ownership rights. These can occur due to human error, fraud, missing heirs or even survey or boundary issues.

Title Insurance in Cypress Lake

Don’t leave your property at risk to claims against its title. Obtain a thorough title search and invest in title insurance to protect your dream home. Before you sign any papers, call Schutt Law Firm, P.A. today at 239 540 7007 and fully protect your home with title insurance in Cypress Lake.
WHY TITLE INSURANCE?
Owning real estate is one of the most precious values of freedom in this country. You want the assurance that the property you are buying will be yours. Other than your mortgage holder, no one else should have any claims or restrictions against your home.

Title insurance is issued after a careful examination of the public records. But even the most thorough search cannot absolutely assure that no title faults are present, despite the knowledge and experience of professional title examiners. In addition to matters shown by public records, other title problems may exist that cannot be disclosed in a search. Title insurance eliminates any risks and losses caused by faults in title from an event that occurred before you owned the property.

Title insurance is different from other types of insurance in that it protects you, the insured, from a loss that may occur from matters or faults from the past. Other types of insurance such as auto, life, or health cover you against losses that may occur in the future. Title insurance does not protect against any future faults, but does protect you from risks or undiscovered interests. Another difference is that you pay a one-time premium for a policy that remains effective until the property is sold to a new owner - even if that doesn't occur for decades.
What is a Lender's Policy?

A lender's policy, also known as a loan policy or a mortgage policy, protects the lender against loss due to unknown title defects. It also protects the lender's interest from certain matters which may exist, but may not be known at the time of the sale.

This policy only protects the lender's interest. It does not protect the purchaser. That is why a real estate purchaser needs an owner's policy.
What is an owner's policy?

An owner's policy protects you, the purchaser, against a loss that may occur from a fault in the ownership or interest you have in the property. You should protect the equity in your new home with a title policy.

What does an owner's policy provide?

- Protection from financial loss due to demands that may be charged against the title to your home, up to the cost of the title policy.
- Payment of legal costs if the title insurer has to defend your title against a covered claim.
- Payment of successful claims against the title to your home covered by the policy, up to the cost of the policy.
Why the seller needs to provide title insurance?

Any purchaser will need evidence that his investment in your property is free of title defects. The title insurance policy that you provide the purchaser is a guarantee that you are selling a clear title to your real estate, unencumbered by any legal attachments that might limit or jeopardize ownership. It will reassure your purchaser that he or she is protected from any risks or losses and could help you close your deal.
Why the buyer needs title insurance?

Without title insurance, you may not be fully protected against errors in public records, hidden defects not disclosed by the public records, or mistakes in examination of the title. As a result, you may be held fully accountable for any prior liens, judgments or claims brought against your new property. If this should occur, your title policy insures that you will be defended at no cost against all covered claims up to the amount of the policy.
How much does title insurance cost?

The insurance commission approves and controls the premiums for title insurance policies. The premiums are paid only once and the cost depends upon the purchase price of the property and the policy amount must be equal to the purchase price.
What does title insurance protect from?
  • Fraud
  • Adverse possession
  • Rights of divorced parties
  • Deeds by minors
  • Undisclosed Heirs
  • Errors in tax records
  • False affidavits of death or heirshipProbate matters
  • Deeds and wills by persons of unsound mind
  • Conveyances by undisclosed divorced spouses
  • Forfeitures of real property due to criminal acts
  • Deeds by persons falsely representing their marital status
  • Documents executed by a revoked or expired Power of Attorney
  • Defective acknowledgements due to improper or expired notarization
  • Mistakes and omissions resulting in improper abstracting
  • Forged deeds, mortgages, wills, releases and other documents
  • False impersonation of the true land owner