Getting Ready For Your Home Closing One of the most lucrative areas to make money in the market today is the real estate market. Even in the development years, the real estate market was the most lucrative market.
IT and other services have taken some of the shine off the market, but reality still shows that real estate is where a person’s fortunes can turn. Apart from the investment aspect, real estate is also beneficial for those who want to own a home in a place they have always wanted. They serve the dual purpose of having a home and making a sound investment decision at the same time.
After all the benefits of investing in real estate, it is also important to know that your investment is covered and protected by insurance. Of all the known types of insurance, title insurance is the most important and protects the lender and/or buyer from potential damage to the “title” of the property being purchased or invested in.
Choosing your Title Company
If you choose your own Title Company, you are less likely to get ripped off with all the fancy “deals” and clauses that other companies offer. Why should you take their word for it? In this world where nothing is stable, you can always reduce the risk of being harassed by damage to your property title by choosing your own title company.
Benefits of Title Insurance
Title insurance is an insurance policy that provides indemnity against loss or damage for many covered property risks related to real estate, including coverage in the event that someone else claims a title to the insured property or in the event that a lender’s priority and enforceability of a mortgage on the property is contested.
Legal expenses insurance covers legal defects that exist at the time the contract is concluded but are not known to the insured at that time. It also covers losses resulting from many forms of property rights fraud.
Legal expenses insurance is widely used in real estate transactions because of its comprehensive coverage and the cost and time it saves. Those who can benefit from legal expense insurance are homebuyers, existing homeowners, residential and commercial real estate lenders, and commercial real estate buyers. Legal expense insurance is available for both residential and commercial properties and must meet the underwriting criteria for legal expense insurance. Policies can be purchased for the lender only or for both the purchaser and the lender.
Title Insurance is available across Canada depending on the company you are dealing with. Policies are taken out by the lawyer/notary acting for the homeowner. In cases where the lender requires this as a condition of the mortgage financing, the lawyer/notary will generally obtain this as part of the lender’s instructions. However, the client also has the option to obtain title insurance without this condition from the lender. The attorney/notary will perform the due diligence research necessary to obtain a policy and will contact the insurer to obtain the policy.
Legal expense insurance is available for a one-time premium. The premium is based on the purchase price (for an owner’s policy) and the registered mortgage amount (for a lender’s policy). For owners, coverage continues as long as the owner retains an ownership interest in the property, and for lenders, coverage continues as long as the insured mortgage is outstanding.
In certain circumstances, owners’ coverage continues even if the original insured no longer has an interest, such as a transfer of title for the benefit of a spouse or a child who receives the property for a small compensation. For lender policies, coverage continues for the benefit of assignees of the insured mortgage.
Getting Ready For Your Home Closing
Okay, you’ve made the offer on your new home, it’s been accepted, all the necessary documentation has been gathered and submitted, and now all that’s left is the actual closing of the home purchase. Then you can begin your new career as a homeowner, with all the rights, privileges and headaches that you deserve.
Many of us approach closing day with fear and trembling, wondering if we did everything right, if all the necessary information was gathered, and if all the numbers will turn out as we were originally told. How can you adequately prepare for what will undoubtedly be a nerve-wracking day?
First, make a list of all the items that need to be completed before the actual closing. Create a binder with all of your closing cost documents so you have them at your fingertips at all times.
Have all inspections scheduled. Home inspections are not required, but you should have them done to catch any potential problems before you sign for thirty years of your life. Other inspections are also required, and your real estate agent can let you know what is required and make sure everything is accounted for.
You will also need to have the house appraised. This is usually done by the lender, but you need to take care of it and make sure it is done in a timely manner. The lender’s appraisal is a crucial step in obtaining your mortgage financing.
Consider all of your contingencies. If there are items the seller needs to provide or repair, make sure they are done before the closing date. You may want to have your home inspector review the work before you consider it satisfactory.
Your lender will close on the mortgage soon after the property is appraised. Stay in touch with your mortgage lender to make sure things are going as expected. Waiting until the last minute can lead to results that are best described as “unfortunate.”
You should know how much money you need to bring to closing (down payment, closing costs, etc.), and you should be clear about the form of the money. In most cases, a certified statement is required. You will also need to show proof of homeowner’s insurance. Your real estate agent or attorney can help you determine the amount you need to bring to closing.
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