Title Closing

Among the many considerations when buying a home, whether it is your fifth or your first, are important insurance policies including homeowner’s insurance. However, one coverage not to overlook is title insurance. Title insurance is a critical element for protecting your investment in your new home, commercial building or property, but it is important to read the fine print. Otherwise, you may come away from the sale without the owner’s title insurance that you thought you had.

What Title Insurance Actually Does

Title insurance is a type of protection that specifically applies to a property’s deed or the history of how the property has changed hands over the years. This may not seem to be anything worth spending money on, but a large number of issues can arise with the title of a property, many of which can jeopardize not only the money you have invested in the purchase but also your ownership and ability to live in the residence.

One of the most common problems faced by those without title insurance is that an issue has occurred at some point in the history of the property; this could arise due to documentation errors or even fraud. If your property is affected by such a mistake, this may mean that the person you bought the property from was not the legal owner and thus, they did not have the authority to sell the property to you. In turn, you then are not the legal owner either. In a situation like this, those without title insurance may need to pay substantial legal fees to defend their right to own the building, or they could lose the property entirely.

Another problem that can arise with a deed is undisclosed liens and other judgments. If you purchase a home and afterward discover that there is a lien on the property, this means that the building is associated with a debt that must be paid. The current homeowner is responsible for clearing all loans from the property, regardless of whether or not that person was responsible for generating the debt in the first place. A title insurance policy can shield you from the responsibility of having to pay liens that were undisclosed when you bought the property.

Why Owner’s Title Insurance Critical

These are just a few of the many potential issues that could arise before or after you invest in a property. For these reasons, title insurance is critical; specifically, owner’s insurance is the most important. It is an owner’s title policy that will offer these protections against problems with the home’s title, but you may be surprised to learn that even if you paid for title insurance during the closing, you may not be covered.

How Lender’s Insurance Can Surprise You

One of the most common pitfalls that new homeowners find themselves in is failing to purchase an owner’s title policy. Before closing on a home, you will likely be expected to pay for a title insurance policy, and so many buyers see this line item on their closing documents and assume that they are protected. However, what has occurred is simply the purchase of a lender’s policy.

When a lender provides money (in the form of a mortgage) to purchase a property, they are putting that money at risk. The buyer could default, pay late or otherwise cause them to lose their investment. One way that could happen is if a title issue arises. Thus, lenders require that buyers purchase a title insurance policy for them.

However, this policy only protects the lender. If you want to make sure that you, as the new owner, are also protected, you will need to secure your own separate owner’s insurance coverage. You can expect roughly the same cost paid for the lender’s coverage, but title insurance is not a repeating purchase. Unlike other types of insurance policies, you will not pay a premium each month; instead, you pay once and are then protected for as long as you own the property.

Trust The Title Experts To Help You Secure The Right Policy For Your New Property

Owner’s title insurance is essential when owning a home, but it can feel overwhelming to ensure that all of the details are taken care of. The experts at Mathis Title Company can help you secure the right title insurance coverage for your new property so that you can rest assured that any title disputes will not threaten your investment in your new home or commercial building. Contact Mathis Title Company to learn more or to schedule an appointment to get started.

Title insurance serves a valuable purpose for you for the entire time that you own a property, but most people do not give it a second thought besides noting its presence as one of the (many) line items at closing. In fact, some individuals select not to purchase title insurance in order to bring the overall cost of closing down.

However, title insurance claims are a relatively frequent occurrence, and some types of issues arise much more common than others. Whether you are considering purchasing title insurance or you already closed on a home and wonder what your new title insurance does for you, you can equip yourself to face any potential issues with your title by understanding the most common problems.

What Title Insurance Actually Does For You (And Your Lender)

Title insurance itself serves as protection against issues with your property’s title, or the documentation that keeps track of the history of the property and who owns it. Because a mistake in a title could mean that you are not correctly shown as the owner of the property, title issues can be severe enough to cost you significant money or even result in you losing your home. This is what title insurance exists for.

It defends you against these issues, such as mistakes made during title transfer. Lenders (the people who supply your mortgage) will typically require that you purchase title insurance for them; this is a separate policy that does not cover you, but it protects their investment should something be wrong with the title. Since lenders view it as important enough to require you to purchase it for them, it is wise to consider a policy for yourself as well.

Lines Of Equity Still Open On The Property

Among issues brought by title insurance policyholders, discovering open equity lines is a fairly frequent one. In the last few years more than ever, people have been tapping into their home’s equity. The most common situation is that borrowers refinance their home with the intent that the proceeds will pay off their outstanding mortgage(s). However, if the proceeds are not sufficient to close those accounts, a new buyer may discover that those accounts are still open after they purchase the home.

Inappropriate Execution Of The Title

Executing the title itself by filling out all of the documentation and properly notating the new owner of the property is the purpose of closing; unfortunately, sometimes this documentation process can go awry. That is why inappropriate execution is the most common claim brought within title insurance policies. Whether the problem is that a person’s name was not spelled correctly or that the signed documents were not appropriately notarized, any challenge that can compromise the integrity of the property transfer must be handled as soon as possible to ensure that the buyer still has a legal claim to the home.

Problems With Closing Itself

Sometimes, the closing process itself grinds to a halt due to unexpected issues, and in the most extreme cases, borrowers or buyers must actively proceed to legal action against the other parties in the transaction. This can occur, for example, if the seller has committed fraud or if the escrow company loses the buyer’s money. Even after closing has occurred, title insurance can still protect you from issues that arose during this time period.

Priority Disputes Due To Foreclosure And/Or Bankruptcy

“Priority” refers to the order in which debt is paid off if an individual sells a property. For example, if a seller had two mortgages, priority would dictate which would be paid first, especially in the event that selling the home did not cover the costs of both. Priority disputes almost always arise as a result of a foreclosure that moves on to a sale or a bankruptcy. However, priority can quickly become complex, and the answer to who is entitled to what first may be muddy. Title insurance can cover you if you discover these issues during a title search and are affected financially.

Trust the Experts to Help Keep You Secure

Title insurance is a powerful tool to secure your investment in your new home—a purchase that, for many people, will be one of the largest they will make in their entire lives. It is worth spending a small percentage of your home’s amount for an insurance policy that you carry with you for your entire ownership journey. The experts at Mathis Title Company would be happy to help you navigate your title insurance claims or secure a policy that is right for you. Reach out to learn more or to get started.

Many homeowners believe that selling a home themselves (without an agent) is a great opportunity to save money when it is time to move into a new space, which may often be true. However, there are several things to be aware of when purchasing or selling a home without the assistance of an agent.

Since the seller now takes on the majority of responsibilities that would have otherwise fallen to the agent, it may leave them vulnerable to costly mistakes that could delay the sale to the buyer, or leave them exposed to liabilities. In this article, learn more about ‘for sale by owners’ liabilities and what you should keep in mind throughout these transactions.

For Sale by Owner Situations

In a for sale by owner, or FSBO, situation, the home is being sold without the help of a listing agent. This allows the owner to save money in exchange for handling all aspects of the sale of the property. They must conduct research to price the home properly, handle all marketing and house tours, and work with buyers’ agents to sell the home.

This process also includes compiling and sometimes drafting paperwork to complete the sale. In some cases, the buyer’s agent will draft the purchase agreement and other necessary contracts, but other times the responsibility may fall on the seller. No matter who drafts the contract, it is important to review it carefully before signing to ensure that no mistakes are made.

Contract Review Process

After receiving a purchasing agreement, both the buyer and seller should review it and ensure that all information is correct. The contract should clearly identify the address of the property and the parties involved in the sale, the prices and terms of the sale, the closing date and costs, an expiration date for the contract, and other important information about the home. Sellers must disclose information that may impact the property’s safety or value, such as wells, lead paint, and termite damage, in the contract. If this information is not disclosed, they could be liable for serious legal ramifications.

Purchase Agreements

The purchase agreement can also be made on the condition of successful inspections, appraisals, financing, and title searches, among other contingencies. These elements can be included at the discretion of the buyer or seller prior to submitting the contract, though they will typically be discussed in advance as well. Either party can cancel the agreement outside of these contingencies only if certain conditions are met, such as the late submission of signed disclosure forms or denial of access for inspection.

Information Accuracy

After receiving the contract, you will need to carefully review it to ensure that all information included is accurate and that nothing crucial has been omitted. If you are the seller, it also helps to put together a counter offer at this time, if desired. The counter offer can change the price of the property, refuse to adopt certain contingencies or cover closing costs, change the timeframe for addressing contingencies, and exclude personal property from the agreement, for example. The buyer can then accept, reject, or make a counter offer of their own.

Assistance From A Title Agent

In many cases, the buyer’s agent assisting with the contract review process is also the title agent. Your title agent can help you draft a contract, negotiate a counter offer, and review contracts before signing to ensure that they are complete and accurate. Like real estate agents, title agents are deeply familiar with the laws surrounding the sale of a home and will be able to identify any concerns with the proposed contract or amend it as necessary to ensure that both parties are satisfied with its terms. Working with an experienced title agent ensures that your sale will be completed in a way that meets your needs and protects you from legal concerns in the future.

Working with a Title Company

Whether you are the buyer or the seller in a FSBO situation, be sure to pay close attention to the legal details of the transaction to ensure it is finished as smoothly and easily as possible. To this end, it may be beneficial to work with a title agent like Robin Mathis at Mathis Title Company. Thanks to her years of experience in both the legal and real estate industries, Mathis can provide her clients with uniquely in-depth guidance that gives them peace of mind throughout the transaction.

She ensures each client receives personalized attention and offers contract review and preparation, title insurance, lien, and refinancing negotiation services. Contact Mathis Title Company today for more information about contract review and the home buying or selling process.

Buying or selling a home is often a long, tedious process with many variables involved. One part of the process that everyone can look forward to is the closing. Also referred to as a ‘real estate settlement,’ the closing on a home is the final step before the buyer receives the keys, documents get recorded and proceeds disbursed. While the concept of a closing seems fairly straightforward, there are some important aspects to consider before transferring the deed from seller to buyer. As you get closer to your closing date, familiarize yourself with the real estate settlement process.

Opening an Escrow Account

All parties involved in a real estate transaction, including the buyer, seller, borrower, and lender, want assurance that their funds are safe and secure. As the buying/selling process can take several weeks or months to complete, having an escrow account in good standing can mitigate certain risks and provide peace of mind. An escrow account allows a neutral third party to take possession of all funds relating to the transaction until the real estate has been settled. After closing, the funds are transferred from the escrow account to the rightful parties.

Performing a Title Search

A title search is a crucial part of the home buying process as it helps reveal possible defects in the title of a property. Along with performing a title search comes title insurance. Title insurance essentially acts as a legal safeguard when purchasing a property. There are two primary types of title insurance including lender’s title insurance and owner’s title insurance. While owner’s title insurance is generally optional, it can be a highly valuable tool to have in the event that a problem is found with the title weeks, months, or years down the line.

Completing a Home Inspection

Problems can be present within a home that may not be obvious right away. A home inspection is a necessary step in the real estate settlement process that helps identify any existing problems with a home before closing. If problems are found during a home inspection, the buyer has the opportunity to ask the seller to make repairs or the buyer may decide to cancel the transaction altogether. A final walkthrough of the property is also completed before signing any closing papers to ensure that no damage has been done to the home since the initial inspection, and that any necessary repairs have been made by the seller.

Signing Mortgage Documents

Before a closing can take place, you will need to work with your lender to complete your mortgage. Your lender will ask you to fill out and sign all documents related to your home loan. Your mortgage documents may include a note which represents the amount you borrowed, a name affidavit that certifies who you are, and a truth-in-lending statement which states the loan’s interest rate, amount financed, the annual percentage rate, and the total loan cost. You may also receive a monthly payment letter that breaks down your monthly mortgage payment, as well as an actual mortgage document that secures the real estate as a debt payment.

Endorsing Property Transfer Paperwork

During the real estate settlement process, the buyer, seller, lender, real estate agent, and title agent must all collaborate to complete the property transfer. All documents relating to the proper transfer must be thoroughly reviewed and signed. There are a number of documents involved in this process, including a bill of sale, an insurance certificate, the deed, and a settlement statement which includes all settlement costs. The buyer will also need to review the proration agreements and acknowledgements of reports. Some of these legal documents may need to be notarized.

Transferring Escrow & Other Costs

Once all of the mortgage and property transfer paperwork has been completed, the transferring of payments to the rightful parties can begin. In addition to the funds found in the reserve account, you may be responsible for certain closing costs. These expenses may include appraisal fees, inspection fees, title insurance costs, application costs, and attorney fees. If you are purchasing a home, you will also need to provide the down payment for the home at this time by wire or certified funds.

Learn More About Real Estate Settlement

While the real estate settlement process can be a lengthy endeavor, it is also an exciting one. Most federal mortgage loans close within 30 to 45 days on average, although the type of home buyer program can sometimes extend this timeline. No matter what type of loan you choose, you can expect your closing to be filled with countless contracts, documents, and other types of paperwork that requires your careful review and signature. To learn more about the real estate settlement process or the importance of acquiring title insurance for your new home, contact the title service professionals at Mathis Title Company.

Mortgage settlement is also referred to as closing. It is when the home buyer, seller, title services company representative, and lender meet to change hands of the property and funds legally. There are also many fees that are associated with closing known as closing costs. What exactly these fees are and who is expected to pay them can be quite confusing since it sometimes varies depending on the situation. Most of the closing costs are going to fall on the buyer, however there is some room for negotiation when the initial offer on the home is made. Knowing what your closing costs are going into closing is very important to make sure you have a successful settlement. Using title services from a reputable title services company can help make the closing process run more smoothly and successfully.

Individual Closing Costs

Closing costs refer to a variety of expenses above the purchase price of the property to include fees for an attorney, a title search, title insurance, taxes, lender costs, and upfront housing costs like insurance. When it comes to buying a house, anytime someone performs an administrative task there is typically a fee associated with it. Often times, the buyer is going to pay any fees relating to their mortgage loan, and the seller usually pays the agent’s commissions and other fees associated with the transfer of the property.

As the buyer, three days before your scheduled closing you should receive your closing disclosure from your lender which will contain the final details about your loan and closing costs. Closing costs can be broken down into several categories including lender fees, title fees, prepaid costs (example: Escrows), and attorney’s fees. Lender fees can either be wrapped in an “origination fee”, or they can be broken down into individual fees like courier fees, appraisal costs, administrative fees, processing fees, a credit check, transfer taxes, a flood certification, and underwriting fees. Title fees include the costs associated with a title search, title insurance, and settlement services. Prepaid costs in many cases involve paying one year of homeowner’s insurance plus two months of homeowner’s insurance premiums to be kept for the next bill due. Typically you are also required to pay two to six months of property taxes depending on when the tax bill is due.

How to Prepare

Before you go to settlement, there are a few things you’ll probably want to do. The first is to review the closing disclosure which outlines the terms of your loan including final closing costs, and any additional outstanding charges of fees. Once you have signed the closing disclosure, there is a three-day waiting period before you can sign the mortgage loan documents.

It is also a good idea to do a final walk through of the property to verify that all agreed upon repairs were made, that the seller has vacated the property, and that the home is in the condition you expected. The time to do a walkthrough is almost always dictated by the contract. It is recommended that you do it 24 hours before going to settlement. If you notice any significant problems, you will have time to get further inspections done or work performed prior to closing. You should also make arrangements to transfer the utilities in your name effective the day of closing.

You’ll also have to bring with you a cashier’s check or wire funds to pay closing costs and escrow items, and a form of government-issued identification, This can include a driver’s license and passports. Usually, only one type of ID is required, although there are some cases in which two forms are required.

Knowing what to expect when you walk into the settlement is the best way to be prepared and to help ensure that everything runs smoothly. You might want to just walk away with your new set of house keys, but you also need to make sure that everything during settlements goes as expected. Mathis Title Company will help you prepare for the entire closing process from top to bottom.

What to Expect During Closing

For buyers, the settlement involves a lot of paperwork. You will have to sign many documents, a primary one being a settlement sheet, which explains the flow of all funds- in and out. You will be presented with a loan estimate, closing disclosure, the initial escrow statement, deed of trust, mortgage Note, and other documents required by state law or by your lender. Signing all of these documents is what takes care of the legal aspect of the settlement. Finally, the keys to the home are exchanged.

For more information about closing costs please reach out to Mathis Title Company at (703)-865-7880.