by Nef Cortez

Most homebuyers are familiar with other types of insurance (auto, boat, life) but are not certain as to exactly what title insurance is when it comes to buying their home. In order to best protect himself or herself, a savvy homebuyer must insist that title insurance is provided for upon the close of escrow. This insurance policy protects a real property owner, and/or the lender, against any potential loss a prospective home buyer might experience in connection with any liens, encumbrances, or defects in the title for the property they are purchasing that might have been missed in the original title search. To clarify some of the real estate legalese, Liens are usually a form of money encumbrance that usually makes property security for the payment of a debt such as a judgment, unpaid taxes, mortgages etc. An encumbrance is anything the burdens the owner’s title. It is basically any interest in the property, possessed by someone other than the owner. In short, an encumbrance is anything that burdens the title with legal obligations.

For example, a previous property owner might have forged their signature when transferring title or there might have been tax liens owed and secured against the property that did not surface with the original title search. Title insurance then covers the home buyer (insured party) for any claims and legal fees that arise out of such problems.

Title insurance also protects against claims from other defects such as another person claiming an ownership interest, improperly recorded documents, fraud, forgery, liens, encroachments, easements and other items that are specified in the policy.

Unlike other types of insurance (car, life, health, etc.) that basically assume risk for future potential events, Title Policies insure the history of ownership of the real property and the people who owned it prior to the date it was issued. Also, unlike casualty insurers who collect monthly or annual premiums, a title policy is usually paid for with a one time premium which is handled at the close of escrow.
While title insurance is not a type of insurance you buy frequently, if any problem were to arise n the future, you’ll be glad you insisted on buying title insurance when you purchased your home!

Nef Cortez has been a licensed real estate broker and has held various positions in the real estate industry for 25+ years. If you would like to read more of Nef’s pithy and timely advice (with the latest info on local foreclosures), visit his website at Chino Hills Homes

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by Peter Kenny

Loan insurance is a product that everybody will be offered when they buy a loan, or might even have included in their loan package without them really knowing about it. If you are in the process of looking for a loan or want to know more about loan insurance, then this article will help you to decide which policy if any is right for you.

What is loan insurance?

Loan insurance is often referred to as PPI, or Payment Protection Insurance. Loan companies will urge you to get this insurance to cover yourself in case you cannot keep up with your repayments due to accident, illness or unemployment. The terms of these loan insurance policies varies from one company to another, and you should check out the policy thoroughly before signing anything.

What are the advantages?

The obvious advantage of loan insurance is that if anything should happen to you that stops you from keeping up with repayments, your loan insurance might be able to help you pay off some of the debt. This gives you peace of mind, knowing that you are covered if the worst should happen. It will cost you a fair amount of money, but if it keeps you covered against possible default if you are taken ill and cannot work, then it is probably worth the money. But is it really that simple?

Problems with loan insurance

Although there are cases when loan insurance is appropriate, there are many cases where you will not be covered by your policy. For example, many self-employed people will never be covered by their policies when they are unemployed, unless their company has completely ceased to trade. The criteria for cover are very strict, and you may find that there is very little in the policy that will apply to you and your circumstances.

Are there alternatives?

There are alternatives to loan insurance, with the main one being not to get the insurance at all. The insurance can add a significant amount onto the loan price without giving you many benefits. However, if you feel that you need cover then look for an independent insurance policy for your loan, which is generally cheaper. Also, you can check your other current insurance policies to make sure that you are not already covered by these policies.

Should anyone get loan insurance?

Although it can be expensive and limited, if you think that loan insurance will give you the peace of mind you want and that the policy will cover your circumstances, then take out a policy. Although many are a waste of money, there are policies that can help you in times of need, and you should look at the policy before accepting or rejecting it. This will help you to get the best deal for your loan, and to make sure you are covered in case you cannot keep up with repayments for some reason.

Peter Kenny is a writer for The Thrifty Scot Please visit us at Bad Credit Loans and Bad Credit Remortgages
Visit www.thriftyscot.co.uk/

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