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Owner's Title Insurance

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matz2

matz2

Sheeeeeeeeeeeit!
Good idea on a newer home purchased from the original owner or a complete waste of money? I'm 95% sure that the title is clean but the cost of the insurance seems like an excessive amount of money when compared to the risk. Any schools of thought on this racket?
 
matz2;1705833; said:
Good idea on a newer home purchased from the original owner or a complete waste of money? I'm 95% sure that the title is clean but the cost of the insurance seems like an excessive amount of money when compared to the risk. Any schools of thought on this racket?
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Be safe.. protect your investment. it's always worth it and in this economy, you never know.
 
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Can you even get a loan without it?

You can select the title company to use... so shop around if you only have one quote that seems ridiculous.

Keep in mind also that because it's a new house doesn't mean that there isn't some problem (however small the probabilty) might be that there may be an issue with the land it was built on... so, you're trusting the previous title companniew ability to establish a chain of ownership on a particular piece of real property.

WOrst case scenario is that you don't do it, you sell it down the line, the next folks have it checked out and there's a problem and your title is unmarketable.

Personally I wouldn't want that hanging over my head.

(my memory is fuzzy here, but, I think it's also going to double check any easments, right of ways, and other stuff like that... )
 
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Remember, even a successful defense to an incorrect or frivolous challenge to your title can cost you tens of thousands of dollars in legal fees - even absent the huge loss if you lose the case because you really did not own all of your property through no fault of your own.

What is the value of your home?

What % is the cost of the insurance?

Can you afford the insurance?

Can you afford to pay the note on a home that you no longer own? The bank still is owed the money for the mortgage even if you do not have good title to your home and do not own it. I mean, the bank no longer has any collateral and it is all unsecured debt that you conceivably could discharge in a Chapter 7 if you had no other property and did not make over the mid-30K range, but is it worth it to do through all of that?
 
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My lender does not require title insurance and it runs about 0.5% of the purchase price (so it's not cheap). I've also heard that title insurance does not always cover you and historically their payout is around 5% of the total premiums they collect. Thanks for the feedback fellas!
 
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matz2;1705945; said:
My lender does not require title insurance and it runs about 0.5% of the purchase price (so it's not cheap). I've also heard that title insurance does not always cover you and historically their payout is around 5% of the total premiums they collect. Thanks for the feedback fellas!
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Oh - it is a money maker. And the odds of needing it are slim. I guess I just weigh the money versus - not the risk, which is small - but the harm, and if I could deal with an actual challenge to the title w/out causing great financial distress.
 
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