Key Benefits of Owner’s Title Insurance

Buying a house is an exciting endeavor. It’s also a significant financial investment. Homeowner’s insurance is an excellent way to protect the structure of your home and cover any damage that may result from fire, certain natural disasters, and other occurrences. But what about intangible threats to your real estate investment, such as improper transfer of ownership due to title defects that surface after you’ve closed on your new home?

Lender’s vs. Owner’s Title Insurance

Owner’s Title Insurance is a type of indemnity policy that covers your financial interests should title problems be discovered after settlement. While most lenders require that homebuyers purchase Lender’s Title Insurance policy to cover their interests if you default on your loan, an Owner’s policy is completely optional. It is, however, highly recommended. Here’s why.

3 Advantages of Owner’s Title Insurance

Even when a very thorough title search is performed on a property prior to your closing, there are still instances in which undetected title issues arise months, years, and sometimes even decades after the home is purchased. A wide range of title defects exist, but common examples of such a situation include undisclosed heirs with an ownership stake who learn of the property or unpaid back taxes on the property. Having an Owner’s policy in place can protect the investment you have made in the home and may save you from a devastating financial loss.

Three key benefits of an Owner’s Title Insurance policy include:

  1. Legal Fees: Should you need to go to court to defend your rights to the property, an Owner’s policy will cover your court costs and other legal fees.
  2. Financial Loses: In the event that you lose your home due to defects that occurred prior to you taking ownership, an Owner’s policy will reimburse your loss up to your policy amount for covered title defects.
  3. Peace of Mind: Knowing you have an insurance policy in place to protect your financial stake in your home can offer peace in mind in the event another party has a successful ownership claim against your property.

Protect Your Asset With Owner’s Title Insurance

Once you purchase an Owner’s policy, its coverage stays in effect for as long as you own the property – even if you refinance your loan. Keep in mind, an Owner’s policy does not cover title problems that occur after you close on the property – only those that affect the property’s ownership before it came into your possession.

Even with a clear title, the chance for defects to threaten your rights to your property after closing does still exist. An Owner’s Title Insurance policy can help protect your investment and the place you call home. For more information on Owner’s and Lender’s policies, visit our Title Insurance page or contact us today.

5 Common Real Estate Closing Questions

Buying a new home is an exciting time in your life. But like many other homebuyers, you likely have questions about the closing process. To give you a better understanding of what to expect, we’ve listed a few of those most common:

How long does the closing process take?

The entire real estate closing process, from contract to close, takes about 30 to 45 days. Factors that may affect the length of this time period include the type of mortgage for which you’re applying, whether any title defects on the property exist, and any repairs that need to be made to the home before you take ownership, among others.

What is the CD Form?

The Closing Disclosure (CD) Form is the document describing the financial details of your real estate transaction, such as loan payment amounts, loan rate, and closing costs. This document replaces the HUD-1 settlement form (used prior to October 3, 2015) and is submitted to you by your lender at least three days prior to closing. It’s important to carefully review this document upon receipt and contact your lender with any questions as soon as possible.

Do I have to purchase title insurance?

Lenders typically require homebuyers to purchase Lender’s Title Insurance, which protects their interest in the event you default on your loan or the mortgage becomes unenforceable. Owner’s Title Insurance is optional, but highly recommended. An Owner’s policy protects your financial interest and investment if title defects are detected after you close on the home.

Do seller concessions cover title fees?

If the seller contributes concessions to closing costs on your behalf (as the homebuyer), then certain title fees may be covered. These may include the Lender’s Title Insurance premium and title search fees, among others.

What should I bring to closing?

On the big day, you’ll need to bring a government-issued ID (driver’s license or passport) to your closing. In some cases, the lender may require two forms of identification or additional paperwork. You’ll also need to present a certified or cashier’s check in the exact amount of your closing costs or provide detailed wire transfer information.

Do you have other questions about your upcoming closing? Contact our knowledgeable team at Linear Title & Escrow today!

Real Estate Closing Checklist for the Home Seller

Selling a home carries the same excitement as buying a new house, for many people. Though most sellers have less to do at closing when compared with buyers, it’s still important to ensure everything is in order to facilitate a smooth settlement process.

Pre-Closing Preparation

In the days and weeks leading up to your closing as a home seller, there are myriad tasks that must be completed. Here’s a checklist highlighting some of main responsibilities pertaining to a seller’s closing, to help make certain you’re ready for the big day:

• Prepare for home inspection.

• Inform your lender of your intent to sell.

• Request loan payoff amount from lender.

• Complete any necessary repairs (or negotiate these items with the buyer).

• Schedule cancellation date(s) with utility companies.

• Review the Closing Disclosure (CD) Form for accuracy.

What to Expect on Closing Day

Buyers and sellers usually have separate closings, and different responsibilities in terms of settlement costs. As the seller, your closing costs typically will include:

• Remaining mortgage balance

• Property taxes and HOA fees owed

• Agent’s commission on the sale

• Title fees and transfer taxes

• Seller concessions/other contract agreements

Make sure to bring the following items to your closing:

• Government-issued ID

• Keys, remotes and list of entry codes

• Certified check or wire instructions for payoff amount

• Wire transfer instructions for proceeds of sale

If you have any questions along the way, be sure to reach out to your real estate agent, lender and/or title company as soon as possible. The more prepared you are for your closing, the more efficient and streamlined the overall settlement process.

Need more information on what to expect at a seller’s closing? Reach out to the Linear Title & Escrow team today!

Real Estate Closing Checklist for the Homebuyer

Buying a house is an exhilarating and life-changing event, whether it’s your first home or one of many. But how can you make certain you’re prepared for the big event?

Preparation and Communication

Careful preparation and ongoing communication with your agent and lender are crucial for facilitating a smooth closing experience. Ensuring you have all of your necessary paperwork and documentation organized and ready to submit to your lender and title agent when needed helps minimize delays in loan approval, and ultimately the closing process. It’s highly important to respond to any lender or title agent requests for information as quickly and thoroughly as possible.

Review the Closing Disclosure Form

The Closing Disclosure (CD) Form is a document submitted to you by your lender at least three business days prior to your closing date. (The CD Form replaces the HUD-1 settlement statement, formerly used for real estate closings prior to August 1, 2015.) This important document outlays the terms of your mortgage, payment amounts and other financial details related to your home loan. Careful review of your CD Form is crucial, as this reflects the information that will appear on your final closing documents. Any discrepancies or questions regarding this form should be resolved and answered prior to sitting at the closing table.

The Day of Closing

It’s extremely helpful to have an idea of what to expect, and what to bring, when the big day finally arrives. To help you prepare, we’ve created a list of what you need to bring to your closing:

  • Government-issued photo ID
  • Any paperwork required by your mortgage lender
  • Certified check in the exact amount of down payment or wire transfer information

Homebuyers and sellers have different closings, as both parties rarely sit at the closing table together. A homebuyer’s closing with our team typically lasts around 30 minutes, unless it involves a Power of Attorney (in which case, requires additional time). Be sure to ask the closing agent any questions you may have as you go through the documents in your closing package. Upon signing the final documents and receiving your keys, you’re free to visit and move into your new home right away!

Have other questions about a homebuyer’s closing? Contact the Linear Title & Escrow team today!

What Is Included in Closing Costs?

Buying or selling a home is a major event in the lives of many Americans. Whether you are purchasing your first home or sitting on the seller side of the closing table, understanding your financial responsibility in the real estate transaction is important to ensuring you know what to expect from the process.

Preparing for a Home Closing

As the homebuyer, you will be informed of your closing costs on the CD (Closing Disclosure) Form, which is a document provided by the lender listing details of your loan, payment amounts and total closing costs for your purchase. Your lender will remit your CD form to you for your review at least three business days prior to your closing date. It is highly recommended that you review this document thoroughly, and ask any questions regarding its content or resolve any discrepancies prior to closing day.

What to Expect as the Buyer

In general, closing costs for homebuyers average between two and seven percent of the sale price. Closings costs for homebuyers typically include the following:

• Mortgage origination fee (if applicable)

• Loan discount points (if applicable)

• Mortgage insurance (if applicable)

• Prepaid mortgage interest

• Homeowner’s insurance

• Home appraisal fee

• Property taxes

• Transfer taxes

• Recording fees

• Title search fee

• Title insurance (Owner’s and Lender’s)

• HOA fees (if applicable)

• Survey (if requested)

• Other closing/escrow fees

What to Expect as the Seller

Even though you’re selling your home, you can still expect to pay some amount of closing costs, with the bulk of the financial responsibility deriving from the real estate agents’ commissions. Seller’s closing costs typically include:

• Loan payoff

• Real estate commission

• Home repairs (if applicable)

• Property taxes

• Title transfer and recording fees

• Closing credits to buyer (if applicable)

• Settlement fees

• Deed preparation

• Courier fees

• Agent administrative fees (if applicable)

• Other closing fees

Have other questions about closing costs or the settlement process? Contact the Linear Title & Escrow team today!

The Value of a Home Warranty

Homeowners looking to sell often purchase home warranties to help attract buyers. In other cases, homebuyers purchase home warranties a part of the real estate process, and may even receive a discount if done so within 30 days of closing on the home.

What Is a Home Warranty?

A home warranty is a protection plan that helps finance repairs or replacements on certain aspects of your home that occur after closing, were not apparent during a home inspection or are not covered by homeowner’s insurance. There are different types of home warranties, each of which is accessed when systems or appliances in your home are not longer in proper working order.

What Do Home Warranties Cover?

Home warranties can be purchased to cover:

• Home appliances (refrigerator, stove, dishwasher, etc.)

• HVAC system

• Electrical system

• Phone system (wiring)

• Plumbing

• Water heater

• Smoke detectors

• Exhaust fans

• Doorbells

• Roof

• Pool

How Long Do Home Warranties Last?

Home warranties are relatively inexpensive, and typically incur a cost between $250 and $500 for an annual premium. Dates of coverage and the time at which coverage begins vary depending on who is purchasing the policy (homebuyer, seller or existing homeowner). At the end of the 365-day term, the owner of the policy can then elect to renew or dissolve the home warranty coverage.

What to Consider When Buying a Home Warranty

Some aspects of your home may be covered under a builder’s warranty, depending on the construction age. If you decide to purchase a home warranty, just be certain that you fully understand the details of your policy, such as under what circumstances coverage kicks in, coverage limits and any additional expenses for which you might be responsible (such as service fees or deductibles). Home warranties only cover those systems and appliances specifically mentioned in your contract.

Protecting Against Wire Fraud During the Closing Process

Technology has certainly improved our lives, businesses and the speed with which we can accomplish a multitude of tasks. However, technological advancements have also increased the incidence of cyber crimes, making it easier for thieves to steal sensitive and personal information, and ultimately your money.

Mortgage Closing Scams

“Mortgage closing scams” are one such fraudulent activity of which home buyers and sellers should be aware. In these scenarios, thieves send emails to unsuspecting parties stating that the wrong wiring information was previously provided or wiring instructions need to be changed, and the funds must be wired to a new or different account number. 

Emails hackers are very skilled at making these emails appear legitimate, and as though they’re coming from a credible source with whom the person has been in contact (home buyer or seller, mortgage lender, real estate agent, title agent or closing attorney).

How to Protect Yourself as Home Buyer or Seller

Closing time in a real estate transaction can often feel hurried and time-sensitive. Even if you’re feeling the pressure of time, it’s best to avoid responding quickly to emails regarding your real estate transaction, without first determining their authenticity. Here are tips on how to protect your personal information and assets as a home buyer or seller:

• Be very leery of emails asking for personal information, account numbers or financial details of your upcoming closing. Also be suspicious of emails requesting a change in payment type, financial institution or wiring instructions. If you receive such an email, do not contact the apparent sender via return email or the numbers provided in the email signature. Instead, visit the title company in person if possible, or use a phone number you know to be associated with the actual company or person.

• Review email correspondence from mortgage lenders or closing agents carefully. Bogus emails are often sent at odd hours of the day or night and may contain poor grammar or sentence structure, misspelled words and odd phrasing. The sender’s email address may also be slightly different (for example, one letter or character off from that of the legitimate party).

• Letting your bank know about anticipated wire transfers, the name of the sender or receiver, and dollar amount of the transaction can help your financial institution identify any red flags indicating fraudulent activity, if they arise. 

• It can be extremely difficult to recover funds wired to a fraudulent account. Protect your money and real estate investment by remaining aware and scrutinizing any communication regarding the real estate closing to determine its authenticity.

Though wire fraud and mortgage closing scams are on the rise, you can minimize your risk of becoming a victim of fraudulent activity by doing your due diligence when it comes to providing requested information.

How We Protect Against Wire Fraud at Linear Title & Escrow

At Linear Title & Escrow, we take the threat of wire fraud very seriously. We utilize encrypted emails when sending wire transfer instructions and do not accept any wiring instructions that are not encrypted. As an additional safeguard, we confirm all wiring instructions, regardless of whether or not we receive them encrypted.

To learn more about to protect against wire fraud, contact our team today!