Title insurance on a new home purchase

[jy2581]

I'm confused. Is this useless? I get the point of it is kind of a cover your ass kind of thing. However, wouldn't any issues to the title be researched by the title company beforehand. Not trying to be cheap, just wondering if it's necessary. Sort of like insurance on a rental car.

 

[noleville]

The real estate industry as a whole is a racket. They have more people in Tallahassee than the gun lobby and cigarettes industry. Title insurance as a whole is a racket, but most banks won't close without it. Just look at closing fees, talk about a racket..

 

[TennNole17]

If you are getting a loan, lenders insurance is required; and therefore "simultaneous issue rates" mean you might as well get an owners policy. I think seller pays for the owners policy, customarily, in Florida, or at least north Florida.

 

[jy2581]

I think our lender said it was optional - the title insurance. I don't know, I have been going 100 mph the past couple of weeks. I think it's around $1k, so if it's b.s. I'd rather not get scammed.

 

[F4Gary]

Can't you get around it by putting more down?

 

[SeaPA]

Can't you get around it by putting more down?

Typically it's the mortgage insurance that you can avoid by having a sufficient down payment (this insurance pays the bank if you default on the loan). Title insurance is completely different & deals strictly with issues over ownership of the land.

 

[F4Gary]

Ahh, that's right. Just sold my house in Austin and that was paid.

Took a whole 6 hrs to sell my house in that market.

 

[montconole]

You can avoid owners title policy but like previously stated, the simultaneous issue makes is worthwhile to buy the owners.

No lender will fund a deal without the lenders policy.

Don't let the title company sell you the gold package or upgraded policy. Not necessary.

 

[seminole97]

Ahh, that's right. Just sold my house in Austin and that was paid.
Took a whole 6 hrs to sell my house in that market.

Sounds like you should have been asking a higher price!
I could sell my car in 6 hours if I listed it low enough...

 

[JohnnieHolmesNole]

Title insurance is like 4-wheel drive.....you don't need it until you need it. There is a 99.99% chance you will never have any issues with the title to your home.....but if a problem somehow arises, you'll wish you spent that $1,000.

 

[RONole]

Yep, for the simultaneous issue charge you may as well get it. I always say if you can't afford that or it would make/break the deal, then perhaps you shouldn't be buying the home.

 

[jy2581]

Yep, for the simultaneous issue charge you may as well get it. I always say if you can't afford that or it would make/break the deal, then perhaps you shouldn't be buying the home.

It's not that I can't afford it, I was just curious. It's already factored in, and we're set to close. Just didn't want to spend a grand if I didn't need to.

 

[TennNole17]

Again, check the contract- typically it's the obligation of the seller to provide the buyer clear title via an owners policy ; and the buyers obligation to pay for the lenders policy.

Due to simultaneous issue, as the buyer, your cost should be nominal- like 100 bucks.

But, reference your contract on who's paying for what. It varies state to state, county to county sometimes

 

[Lemon Thrower]

when you have a mortgage, the lender requires that you pay for mortgage insurance which insures the lender. you are not required to insure yourself, but if you buy it at the same time the cost is minimal. depends on the value of the house but would likely be more than $100. Maybe 250-500.

 

[jy2581]

Again, check the contract- typically it's the obligation of the seller to provide the buyer clear title via an owners policy ; and the buyers obligation to pay for the lenders policy.

Due to simultaneous issue, as the buyer, your cost should be nominal- like 100 bucks.

But, reference your contract on who's paying for what. It varies state to state, county to county sometimes

Just checked. We're responsible for both.

 

[jy2581]

when you have a mortgage, the lender requires that you pay for mortgage insurance which insures the lender. you are not required to insure yourself, but if you buy it at the same time the cost is minimal. depends on the value of the house but would likely be more than $100. Maybe 250-500.

On our fees worksheet they have owners title insurance of $975, lenders $162. Both paid by us.

 

[LT4PLY]

when you have a mortgage, the lender requires that you pay for mortgage insurance which insures the lender. you are not required to insure yourself, but if you buy it at the same time the cost is minimal. depends on the value of the house but would likely be more than $100. Maybe 250-500.

This makes no sense. Mortgage insurance is on a mortgage and is payed monthly if you don't have enough equity in the home. Title insurance is paid up front. The simultaneous issue charge is a fancy way to say they are covering the lender and the homeowner... i.e. issuing 2 policies even though they are really issuing one and covering 2 parties. As already stated you will likely never need it but in the obscure case of a title issue it's cheap insurance.

Different places charge different rates for title insurance. You can shop around although it's likely that the mortgage/realtor/whatever will make it sound like the rate is the rate.

 

[jy2581]

There's gotta be some way to find, through a simple search, if there are any liens on a property, or issues with the deed. I mean, this is a house that's passed from owner to owner. It's not a piece of land that's passed through all the grandkids over a 100 yrs. lol I really want to roll the dice and just forego the policy. Live dangerously? Come on, LR...who's with me??

 

[Lemon Thrower]

i meant to say title insurance.

mortgage insurance compensates the lender if you don't repay the mortgage.

title insurance compensates the insured party if it turns out you did not acquire marketable title to the property. there are many legal technicalities why that might be the case, albeit rare.

 

[montconole]

Find out the cost of the lenders title insurance without the owners being issued at the same time. I would wager the $162 quoted will change.

 

[swflnole]

Title ins is $5.50 per 1000 for the first 100k of the loan and $5 for each 1000 after.....so basically $1050 for a 200k loan. The owners policy should be no more than $200, any more than that and they are ripping you off

 

[jy2581]

Title ins is $5.50 per 1000 for the first 100k of the loan and $5 for each 1000 after.....so basically $1050 for a 200k loan. The owners policy should be no more than $200, any more than that and they are ripping you off

Do you mean the lenders policy should be no more than $200?

 

[swflnole]

Do you mean the lenders policy should be no more than $200?

I just talked with my title girl......owners is $575 per 100k, lenders is anywhere from $25 to $250 providing it is a simultaneous issue....she believe the lender policy was capped at 250 but wasn't sure on that

 

[TennNole17]

Florida is the Wild West on simultaneous issue rates as I recall lol

 

[Bud Fox]

Florida is the Wild West on simultaneous issue rates as I recall lol

Title insurance is a slippery slope. My cousin is a RE attorney in NYC. About 8 years ago, they worked on a huge piece of property in the Appalachians that the government purchased. His firm handled the title work & insurance. About 6 months after the purchase, the government was transforming the property into training grounds, when a family showed up with a land deed from the 1800s that showed his family in fact owned a large parcel of the land. Madness ensued, as this family had no interest in selling. Eventually they worked it out, but the title insurance company paid out a ton to settle this issue.

 

[RONole]

The 5.75 per 1,000 for 1st 100K and 5.00 above 100K is correct. It actually changes again at 1 mill (I assume since we are in the locker room many may need to know this). They can issue that to owner or lender policy technically and then do simultaneous issue on the other. The simultaneous issue fee will vary based on title company. I generally use $250 when creating an up front quote for a borrower as the lender.