Thursday, January 15, 2009

Title Insurance

The bank requires that you buy title insurance when you borrow money from the bank to buy a piece of property The title insurance makes sure that whoever sells you the property has the legal right to do so. The bank wants to protect its equity in the poverty while you are paying down the mortgage.

Thus, when you close on a house typically must buy title insurance from a title insurance company for about for every $1,000 of coverage. The minimum the bank requires is equal to the amount of equity the bank has in your property. That covers bank's risk.

But what about your financial risk, which is equal to the equity you have in the property? For this you can purchase owner's title insurance for about $3.50 per $1,000 of coverage. If a flaw in the title comes to light some 20 years after you've bought your home. the title insurance company forks over the money, even if the value of your property has risen ten times.

Since you only buy this insurance one time when you purchase your propertyit can be very good deal for a lot of protection over a lot of years. On a $120,000 home, you would spend $420 only once for private title insurance that covers your spouse as long as you own it.

1 comment:

  1. This insurance is really important to secure the ownership of the property. And this scheme recently came into existence as many years back I haven't heard about it. Thanks a lot for explaining about it.
    commercial property insurance


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