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Why do I need Title insurance when I buy a house?
Title insurance? What is it and why do I have to pay for it?
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This is a fairly common question that I hear come up from home sellers when they are thinking about listing their home as part of the the
Colorado Springs real estate market. It is often a sales cost they didn’t figure in because they weren’t aware of it. Since I’ve been dealing with a home with title issues all week, I thought I would write a post and try to answer this question and many other questions about title insurance.
Who provides the Title Insurance?
In Colorado, title insurance companies provide title insurance.
Why do I need title insurance? Why do I have to provide it to a buyer?
Title insurance will protect you against certain kinds of damage caused by a defect in the title. In Colorado, a standard title insurance policy will protect against things such as:
- Errors or omissions in deeds
- Mistakes in examining records
- Forgery
- Undisclosed heirs
- Liens for unpaid taxes
- Liens by contractors
There is also the option of getting Owner’s Extended Coverage which protects against further title issues. This is usually requested in the Contract to Buy/Sell.
Does Title Insurance ever find problems?
Some Title Companies say that more than 1/3 Read the rest of this entry »
What are closing costs?
Closing cost explanation
For a free Buyers Guide, Email Kathy Torline at KTorline@msn.com
When buying real estate in Colorado Springs, the closing is the last step. It is the process of passing ownership of property from seller to buyer. As a buyer, you should be familiar with these costs that are both mortgage-related and government imposed. Here are some common fees:
Appraisal Fee: This fee pays for the appraisal of the property. You may already have paid this fee at the 
beginning of your loan application process.
Credit Report Fee: This fee covers the cost of the credit report requested by the lender. This too may already have been paid when you applied for your loan.
Loan Origination Fee: This fee covers the lender’s loan-processing costs. The fee is typically one percent of the total mortgage, but varies from lender to lender.
Title Insurance Fees: These fees generally include costs for the title search, title examination, title insurance, document preparation and other miscellaneous title fees.
PMI Premium: If you buy a home with a low down payment, a lender usually requires that you pay a fee for mortgage insurance. This fee protects the lender against loss due to foreclosure. Once a new owner has 20 percent equity in their home, however, he or she can normally apply to eliminate this insurance.
Prepaid Interest Fee: This fee covers the interest payment from the date you purchases the home to the date of your first mortgage payment. Generally, if you buy a home early in the month, the prepaid interest fee will be substantially higher than if you buy it towards the end of the month.
Escrow Accounts: In locations where escrow accounts are common, a mortgage lender will usually start an account that holds funds for future annual property taxes and home insurance.
Recording Fees and transfer taxes: This expense is charged by most states for recording the purchase documents and transferring ownership of the property.
Must Read Posts for Buyers and Sellers:
- It’s against the law
- Who is Representing YOU?
- Shop for a Lender like you shop for a house
- Research who you are working with
- 8 biggest mistakes made by home buyers
- Colorado Springs Home — Is a Condo or a Townhome right for you?
- Joint Tenants or Tenants-In-Common, the choice is yours when purchasing a home
- How to choose a Buyer’s Agent
Keep in mind that you can negotiate these costs with the seller during the offering stage. In some instances, the seller might even agree to pay a portion of all of the settlement costs.
If you enjoyed reading this article, why not Kathy (719-287-1049) KTorline@msn.com
