Buying a Lake Havasu home is an investment. Whether it is your first home or your tenth one, you need to come up with some money to make it happen. Like many other areas of your life, you must pay for insurance to cover yourself in case of unforeseen circumstances. Lenders require that you pay PMI if you put less than 20% of the purchase price down on your loan. They also require that you pay title insurance as part of the home buying process.
Title Insurance
What Is It?
During escrow, your lender performs a title search. This provides the name of all past legal owners of the Lake Havasu home you wish to purchase. It may also uncover issues that could create a problem for transferring the title to you once escrow closes. Title insurance covers the expenses involved in resolving any issues that may come up due to an issue overlooked during the title search or a future claim that questions your ownership after you legally become the homeowner.
Why Do I Need It?
Most of the time, title searches run pretty smoothly. However, hiccups do occur on occasion. A title search may uncover issues like a title dispute between beneficiaries, liens, fraudulent claims, or even clerical errors. Yes, something as simple as a typo can hold up the transfer of title. If a title search misses any of these but they come back on you after you assume title of the property, title insurance covers the expenses involved in clearing up these issues. Like car or health insurance, you hope you do not need it but will be extremely grateful you have it if you do.
How Much Does It Cost?
Basically, title insurance comes in two types: lender's and owner's. Your lender requires you to pay for a lender's title insurance policy. Like PMI, it covers the lender in case an issue arises. Unlike PMI, you only pay this insurance once...as part of your closing costs. An owner's policy on the other hand is optional and covers you if a problem comes up even after you take over ownership of the property. Lender's policies in Arizona only cost about $100 for a $300,000 home loan, according to Smart Asset. Feel free to shop around for the best price if you wish. Owner's policies tend to cost no more than a couple of hundred dollars (if that much). When you decide that you want to look for a new Lake Havasu home to make your own, please contact me at (928) 208-5154 or via email.
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Originally posted on my Lake Havasu area real estate blog here: https://havasuareahomes.com/title-insurance-what-why-and-how-much/.
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