Protect Against Worst-Case Scenarios

For first-time home buyers, there are numerous steps to securing your dream home. In an ideal world, the process would be straightforward with minimal paperwork and fees involved. However, that just isn't the case.

Fortunately, when things start to go wrong, title insurance can protect you from anything that stands between you and that dream home. Here are three nightmare scenarios that demonstrate why you need title insurance:

The Mysterious Second Seller

Many would assume that the individual or people selling their home to you would, in fact, be the owners. Sounds reasonable enough. However, sometimes the original seller has hidden baggage in the form of incomplete or nonexistent ownership.

In the event that a relative lays claim to your potential new home, you have to negotiate, buy them out, or go to court to duke it out. If a judge rules in favor of the other party, you can lose out on your down payment and any portion of your principal balance paid towards the home.

While a lender's title insurance policy will protect the bank against any costs incurred, this doesn't help you at all. Alternatively, an owner's title insurance policy covers you against any accrued losses, allowing you to walk away as if you never heard of the property, to begin with.

Neighborly Quarrels

We aren't destined to be guaranteed perfect neighbors in life, but some neighbors are better than others. In the event, that your prospective neighbors add to their property and it overlaps onto yours, you can have issues. If this occurs prior a home closing, title insurance will cover the costs needed to resolve the issue out of court.

Hidden Mortgages & Unpaid Taxes

While Cambridge Title Company has an excellent system for conducting a title search on a property, other systems may not uncover incorrectly posted mortgages. If you find yourself saddled with this situation and you have owner's title insurance, file a claim and your policy will take care of the mortgage. Otherwise, you're stuck with the extra costs.

Similarly, if the seller had unpaid taxes on the property and you receive a delinquency notice following the closing, you will be stuck with the taxes. That is unless you have owner's title insurance.

Summary

Life is full of unexpected circumstances. Similar to any other type of insurance that you've purchased in the past, owner's title insurance is there to protect you against life's "what-if's".

For more information on purchasing title insurance, contact Cambridge Title Company by phone at 224-330-1886 or by email at info@cambridgetitleco.com.

Servicing Your Loan

Along with title insurance, loan servicing is another important facet of the home closing process.
Your loan servicer is the organization that collects your loan payments, which can be different from your lender. Either when you first apply for your loan or within the following three business days, Real Estate Settlement Procedures Act (RESPA) requires that your lender or mortgage broker tell you in writing whether someone else may be servicing your loan.

After your settlement, if your loan servicer transfers the servicing of your loan to a new servicer, RESPA requires that you be notified in writing at least 15 days before the transfer. This notice must also inform you of when the transfer is effective and when you will begin making payments to the new servicer. Thirdly, the notice letter must include the new servicer's contact information along with any other information pertinent to your loan's servicing.

In the event that your loan requires an escrow account, your servicer must present you with an initial escrow account statement at your settlement or within the following 45 days. This statement will show all of the payments that are expected to be deposited into your escrow account and all of the disbursements that are expected to be paid from the escrow account during the year.

On an annual basis, your servicer will review your escrow account and send you a disclosure which should include the prior year’s activity. Also, this disclosure must indicate any adjustments in the escrow payments needed for the upcoming year. However, if your loan is overdue by more than 30 days, you will not receive this disclosure. Remember that your monthly payment can increase if your taxes or insurance payments increase.

For additional questions pertaining to loan servicing and escrow services, contact Cambridge Title Company by phone at 224.330.1886 or by email at info@cambridgetitleco.com.

Ready to be a Homeowner?

Since property is one of the most expensive purchases of a person’s life, it’s important to be sure that you’re ready for it. With that said, here are questions to consider:

Are you ready to be a homeowner?

It is critical to consider whether you have saved enough money to make a down payment in addition to being able to pay your other debts. You must have job stability and a steady income.

How long do you plan on living in your home?

Real estate is not always an investment that grows in value. No one can predict what will happen within your local housing market. If you plan to sell your home in the next few years, realize that the property may not increase substantially in value or may actually lose value. Ultimately, it’s possible to owe more on a mortgage than the home equals in value.

What is your estimated monthly payment for the home?

In addition to the monthly payment for principal and interest, you will have to pay for taxes and insurance and possibly homeowner association dues. If your down payment is less than 20 percent, your lender may require that you pay the added expense for mortgage insurance.

What are the other costs of owning a home?

Be realistic about the costs of owning a home like heating and cooling and other utilities. You will generally need to budget for repairs and routine maintenance of your home, especially if you buy an older home.

For information on homeowner’s title insurance, contact Cambridge Title Company by phone at 224.330.1886 or by email at info@cambridgetitleco.com.

Why Conduct a Title Search?

You may have noticed on our attorney and lender services pages, one of the services Cambridge Title Company offers is a tract search, otherwise known as a title search. But what does this mean for a prospective home buyer?

By definition, a title (tract) search conducted to discover whether there are any defects in the ownership of a particular "tract" of land.

Let's put it this way: You're in the process of wrapping up a home closing. Both parties have agreed to the terms and the financial arrangements have been put into place. So what happens now?

The title insurance agency, let's say Cambridge Title Company, for example, conducts a title search. This search recovers all sorts of information, including whether the seller actually has the right to sell the property you're on the cusp of purchasing and what rights you'll have to the property in question.

Without this title search, you're left vulnerable to a plethora of issues. For instance, the actual owner can show up down the line and claim that you're living on his or her property.

This is why home buyers purchase title insurance. For a one-time fee, homeowners are extended a wide array of protections for their homes. As part of the title search process, title insurance agencies determine the insurability of a property's title and protect you from any legal expenses at a later point in time.

By conducting a title search you're gaining five primary items:

• chain of title
• tax search
• report on possession
• judgment and name search
• commitment

Over the next five weeks, we'll dive a little deeper into what each of these items is and how they all affect the title insurance process.

For more information on title insurance, please contact Cambridge Title Company by phone at 224-330-1886 or by email at info@cambridgetitleco.com.

Pros & Cons of Purchasing a Manufactured Home

For the past month, Cambridge Title Company has discussed the pros and cons of purchasing various types of homes, including the single-family home, the townhome, and the condominium. Today, we wrap up this segment by discussing the pros and cons of purchasing a manufactured home, also known as a mobile home.

For starters, a manufactured home is a variation of a mobile home. However, these units differ from single-family homes in the sense that they are built remote from the property. That said, final assembly usually occurs on the actual property.

As always, we'll get started with the pros.

Pros

By purchasing a manufactured home, you can easily transport your home in the event that you relocated to another property. In addition, this is also usually cheaper than purchasing a single-family home while simultaneously granting the same benefits of privacy and customization.

Cons

Although you can customize the manufactured home as you please, you'll probably face architectural limitations since they're premade elsewhere. More so, the lower price comes at the cost of reduced durability and longevity, meaning another home purchase could be in the not-so-distant future.

For more information on title insurance and escrow services, please contact Cambridge Title Company by phone at 224-330-1886 or by email at info@cambridgetitleco.com.

Pros & Cons of Purchasing a Condo

Last week, we discussed the pros and cons of purchasing a townhouse. This week, Cambridge Title Company is going to talk about another type of home: the condominium. Similar to last week, we'll be reviewing the various pros and cons to purchasing this type of property unit. With that said, let's start with the pros.

Pros

Similar to an apartment in terms of structure and multi-unit design, a condo (or condominium) are usually apartments converted over to this type due to change in property ownership. Condos are usually cheaper than single-family homes or townhouses because of their size. In addition, owners have creative freedom over the unit's interior layout and design.

Cons

On the other hand, condominium owners are often subject to a homeowners' association fee for improvements to the building's exterior. Also, there may be a special assessment mandating a one-time payment of a predetermined amount.

Because the unit is directly linked to neighboring units, owners will face the same disadvantage as townhouse owners: privacy. More so, the building's exterior is usually controlled by the property manager.

For more information on title insurance and escrow services, please contact Cambridge Title Company by phone at 224-330-1886 or by email at info@cambridgetitleco.com.

Pros & Cons of Purchasing a Townhouse

Last week, we discussed the pros and cons of purchasing a single-family home. This week, Cambridge Title Company is going to talk about another type of home: the townhouse. Similar to last week, we'll be reviewing the various pros and cons to this type of property unit. With that said, let's start with the pros.

Pros

A townhouse can be described as a home attached to one or more house, as shown in the image to the right. Typically, townhouses are located on a specific property which is owned by the townhouse owner. Townhouses range in size and architecture, and can include duplexes and even triplexes.

Because townhouses are attached on either or both sides to additional townhouses, they offer heightened security created by the high-density community. With such you can also save on exterior maintenance, due to townhouses looking more or less identical to their counterparts. Lastly, because of the dense community, you may have easy access to other amenities, such as a pool, tennis courts, exercise facilities, and more.

Cons

The most immediate downsides are lack of creative freedom and privacy compared to that of which you would find in a single-family home. With buildings on either immediate side, privacy is greatly reduced. Similarly, since townhouses are identical to and attached to one another, you can't build out your home as you see fit.

Finally, with the easier access to amenities, you're likely part of a homeowners' association (HOA). Being part of an HOA requires monthly or annual fees in addition to any property-specific fees.

For more information on title insurance and escrow services, please contact Cambridge Title Company by phone at 224-330-1886 or by email at info@cambridgetitleco.com.