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.

Pros & Cons of Single-Family Homes

Cambridge Title Company offers title insurance to both residential and commercial property buyers. Today, we'd like to explore one of the various types of residential properties available to home buyers: the single-family home.

When buying a home comes to mind, this is probably the most typical example. Single-family homes can be described as free-standing properties that don't share walls with neighboring homes or properties. These properties are built from the ground up and are located on their own set of land.

Pros

The number one pro to owning a single-family home is that you, as the owner, would own everything. This includes the home itself and its accompanying land. Because of this, you can landscape, remodel, or rebuild the home to satisfy your own desires.

Cons

On the other hand, you may find yourself restricted by the deed of the property. In addition, you are solely responsible for all repairs and maintenance along with the aforementioned remodeling work.

Also, you will likely have fewer amenities (money willing) than at a larger complex, such as swimming pools, exercise facilities, and tennis courts. Finally, if the property is part of a subdivision, there also may be homeowners’ association (HOA) 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.

The Best Closing Time

For business professionals in countless industries, the end of the month is the most hectic period of time. The same can be said for the title insurance industry. So when is the best time to close on your home?

While many aim for the end of the month because of perceived savings, the total costs remain roughly the same. Generally, interest rates are lower towards the beginning of a month. However, buyers then normally pay another note (with lower interest earlier in the month). There is an exception in the event of a Federal Housing Administration loan.

More so, if you're a first-time home buyer, you're probably transitioning from an apartment. Despite the fact that you're purchasing a property, you can't deduct your rent payments on your taxes. Plus, many people would rather move to their new home sooner than later.

In addition, by waiting for a day ranging from the 29th through the 31st, you have a higher chance of competing with numerous others also trying to close on their property on one of those days.

Of course, we haven't even examined the mantra that "time kills deals". While you aren't guaranteed to lose out on selling or buying a property by waiting a few weeks, it wouldn't be unheard of for either side to find a better deal in the eleventh hour.

By closing earlier in the month, you will usually receive better service from everyone in the lending and closing industry.

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

Be Prepared for Closing

The process of closing on a home is an arduous journey. When the time comes, the last thing anyone wants to be is unprepared. But what do you need to bring with you? Today, Cambridge Title Company runs down the basics.

Please keep in mind that if you're in the role of the "buyer", your checklist will differentiate from that of the seller. For starters, a home buyer should bring the following items to a home closing.

• Buyer's copy of purchase agreement
• Cashier's check(s) to make all payments
• Proof of insurance for fire, casualty, etc.
• Invoices for any unpaid taxes, utilities or assessments
• Photo identification, including a passport, driver's license, and/or state-issued identification card

Meanwhile, as the home seller, some items will be similar to those on the home buyer's checklist. Similarities include:

• Seller's copy of purchase agreement
• Invoices for any unpaid taxes, utilities, assessments, and latest utilities meter readings
• Photo identification, including a passport, driver's license, and/or state-issued identification card

However, as the home seller, you will also need to bring these additional items:

• Receipts for last payment of interest on mortgages
• Bill of Sale of personal property covered by the purchase agreement
• Any unrecorded instruments that affect the title
• Proof of satisfaction of any mechanics' liens, chattel mortgages, judgments, or mortgages that were paid prior to the closing

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

Title Commitments & Policies

For nearly twenty years, Cambridge Title Company has provided title insurance and escrow solutions to Chicagoland homeowners. Over the years, we've answered numerous questions from our customers. Today, we'd like to address another one. So what is the difference between a title commitment and a title policy?

First of all, a title commitment is issued before a home's closing. Basically, this is a title company's way of saying that they will issue title insurance assuming that the home seller fixes any outstanding issues with the property.

While this commitment doesn't assure the home buyer that there aren't any issues nor will there be in the future, it does alert the buyer to items that may cause problems.

On the other hand, a title policy is issued after the home closing. The purpose of the policy itself is to provide full property coverage.

Title policies come in two flavors: an owner's policy or a loan policy. Owner's policies are used to protect you from questions of property ownership that were unheard of prior to closing on the property. Meanwhile, the loan policy protects your mortgage lender till you pay off the property, including interest.

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

Title Insurance: Lender vs. Owner

Title insurance and escrow services can be a complicated subject. In this week's blog, Cambridge Title Company is diving into whether or not you need seperate title insurance from your mortgage lender.

When it comes to title insurance, a lender's policy only covers the amount of the mortgage loan, which usually isn't the full value of your property.

If someone were to follow a lien against your property, the lender would be protected due to lender's title insurance. Because of this, the lender would be indifferent to the claim unless it threatened their ability to foreclose on your property. This would ultimately prevent them from recovering their principal value with interest.

Additionally, lender's title insurance wouldn't protect you against incurred legal expenses paid out to protect your right to the property. This is where owner's title insurance comes into play. With this form of title insurance, your legal expenses would be covered. Should you lose the right to the property you would have paid a fraction of the otherwise cost.

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

Anti-Discrimination in Home Buying

Many people may be afraid of facing discrimination when applying for credit. However, numerous protections are offered throughout this process.

The Equal Credit Opportunity Act (ECOA) prohibits creditors from discriminating against applicants throughout the transaction process. These protections are focused on discrimination because of race, color, religion, national origin, gender, marital status, or age.

In addition, creditors are unable to discriminate against an applicant due to any portion of his or her income deriving from a public assistance program (i.e. welfare). For those afraid of retaliation for exercising rights under federal consumer credit protection laws, there are protections in this case as well.

Not only does the ECOA apply to credit transactions involving residential property, it also extends to other credit transactions. For example, if you're applying for a credit card or an auto loan, you would be covered here.

Another law, the Fair Housing Act, prohibits housing discrimination because of race, color, religion, sex, disability, familial status, or national origin. This ranges from someone selling a home to you, loan application, property improvement, and residential real estate appraisal

For additional questions regarding real estate law, contact Cambridge Title Company by phone at 224.330.1886 or by email at info@cambridgetitleco.com.

Advice for Managing Title Insurance

Title insurance is a practical necessity to any real estate closing. While lender's title insurance protects those who extend a mortgage to you, owner's title insurance protects your right to a newly purchased property. While it doesn't insure you against every possible situation, it does cover a majority of the more common blindsides that you may face as a homeowner.

With that said, here are some common tips and stumbling blocks when dealing with title insurance.

ProTip #1: Read the Binder

Let's be honest, title insurance paperwork isn't the most exciting thing in the world. But it doesn't hurt to review it. The title insurance binder or commitment can include valuable information, such as:

• old deed restrictions
• the home's history
• land usage restrictions
• homeowner association restrictions

While you can risk violating any of these restrictions, in some areas, individuals drive around the neighborhood to ensure there aren't any apparent violations. On a year-to-year basis, complaints range from minor inconveniences to full requests for removal of structures on another person's property.

ProTip #2: Understand the Exceptions

The title insurance packet will include a section that elaborates on what is exempt from the policy's protection.

For example, utility providers need to be able to access their respective power lines, piping, etc. For certain utilities, such as water lines, employees of these companies need to dig underground for access. If an owner has something obstructing their path, like a concrete patio, the utility providers can destroy it to get through and leave the homeowner with the full damages.

ProTip #3: Understand What is Covered

On the flipside, it's important to thoroughly understand the provisions and protections offered by your title insurance policy. In fact, these can change from state to state.

For example, New Mexico excludes property survey coverage from a basis title insurance agreement. This is done to make the premiums more affordable for the home sellers.

ProTip #4: Don't Rely on Others

Ask as many questions as humanly possible to ensure you fully comprehend your title insurance policy. If you allow others to give you their understanding, you're basically playing "the telephone game".

This isn't to say that realtors, attorneys, and title insurance companies aren't trustworthy. This is merely to advise that you seek to retain the knowledge for your own purposes.

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

Determining a Home within Your Budget

Home buying mandates a series of small decisions. Do I live in the city or in the suburbs? How many bedrooms do I want to have? How far is the location from my work environment?

All of these decisions cumulate in one large one: Where will I live?

For many prospective home buyers, the first step is to determine your budget. To calculate what type of home you can afford, it's crucial to first know your monthly income. Secondly, determine your total monthly expenses, including items such as credit card bills, insurance premiums, and car payments.

When synthesizing this information, consider reaching out to a financial professional. For example, a housing counselor can help you determine what you can reasonably afford. By keeping your payments within an affordable budget, you can avoid potential financial hurdles, such as foreclosure.

Mortgage lenders will tell you the amount of the loan they're willing to offer you. This takes your ability to repay the loan into consideration. That said, it's probably safe to say that you comprehend your socioeconomic situation better than anyone, so invest thorough thought into one of the biggest decisions you'll ever make.

For more information on the finances of home buying, contact Cambridge Title Company by phone at 224.330.1886 or by email at info@cambridgetitleco.com.

Types of Loans and Programs

Shopping for your loan is probably the most important step in your home-buying process. Mortgage brokers and lenders have a wide variety of mortgage products. The type of loan product and your interest rate will not only influence your total settlement costs but will determine the amount of your monthly mortgage payment.

Government Programs

You may be eligible for a loan insured by the Federal Housing Administration (FHA), guaranteed by the Department of Veterans Affairs (VA), or offered by the Rural Housing Service (RHS). These programs usually require a smaller down payment. Ask your lender or mortgage broker about these programs. You should shop and compare quotes from different loan originators because each may offer different rates and loan terms.

If you are a first-time home buyer, ask your real estate agent/broker and loan originator about the availability of local or state programs such as reductions in transfer taxes, special income tax deductions, or state homestead exemption discounts.

Types of Mortgages

Two of the most common types of mortgage loans are fixed-rate mortgages and adjustable-rate mortgages. The interest rate on a fixed-rate mortgage will remain the same for the entire life of your loan while the interest rate on an adjustable-rate mortgage (ARM) may adjust at regular intervals and may be tied to an economic index, such as a rate for Treasury securities. When the interest rate on an ARM adjusts it may cause your payment to increase.

Some adjustable-rate mortgages allow the borrower to pay either the “interest only” or less than the “interest only”. In both options, none of the mortgage payment is applied towards the loan balance (principal). In a less than “interest only” option, the unpaid interest is added to your loan balance and you can owe more than the amount you initially borrowed, even if you make all your payments on time. This is called negative amortization. If you are a first-time borrower and your mortgage could result in negative amortization, your lender is required to make sure you get homeownership counseling before you borrow the money.

When the loan balance increases to the maximum amount the loan is “recast” and your loan payment may double or even triple. When faced with “payment shock,” you may discover too late that the loan payments no longer fit within your budget and that the loan is difficult to refinance. You may then be in danger of losing your home.

For additional information on the types of loans and government programs, please contact Cambridge Title Company by phone at 224.330.1886 or by email at info@cambridgetitleco.com.

Protecting Your Property Rights

When it comes to protecting your rights as a property owner, start by purchasing an owner’s title insurance policy. A one-time fee to a title company, such as Cambridge Title Company, can protect your property for you and your heirs throughout the duration of property ownership.

An owner’s policy protects you from:

• Unpaid mortgages

• Unpaid property taxes

• Child support liens

• Missing heirs who could claim the property belongs to him or her

• Missed easements or rights of way that could limit your use of the property

Title insurance policies take on two forms: an owner's policy for the home buyer and a loan policy for the lender. While a majority of lenders require a loan policy based on the value of an when issuing a loan, it only serves to protect the lenders. This is why it's vital to purchase an owner's policy to ensure perpetual protection.

For additional questions on how Cambridge Title Company can help you with an owner or lender policy, contact us via phone at 224-330-1886 or email at info@cambridgetitleco.com.

Home Buying is Rebounding for Cambridge Title Company!

On this blog, we've written in great detail about the Illinois housing and real estate markets. By now, it's no secret that Illinois has terribly low home inventory on the market. Meanwhile, interest rates continue to creep up.

But in spite of that, Cambridge Title Company saw a record month for 2017 last month. As a matter of fact, Cambridge Title Company saw a 72% increase in home closings from April 2017 to May 2017. It seems the home buying season is finally here.

Cambridge Title Company sets itself apart from the competition primarily through its private banking level of customer service, meaning that each client is treated as if they are the only client in the world. Our customer first mentality speaks volumes about the way we handle each home closing, whether it's through our flat-rate fees or through our negotiation style.

For more information on Cambridge Title Company, call us at 224-330-1886 or email us at info@cambridgetitleco.com.

Declines in Home Sales

Now that we're headed into June, April home sales data is fully available. Unfortunately, the real estate market continued its streak of ups and downs, this month being the "downs".

The Chicago Tribune reports that "Sales were down 2.3 percent compared with a year ago, but prices rose 5.2 percent as sellers raised prices amid a limited supply of homes for sale. There were 10,157 homes sold."

Illinois Realtors further expounds on this data with revealing statistics on the inventory level. In April 2016, 41,558 homes were for sale, whereas April 2017 only had 33,503 homes for sale. Additionally, while closed sales declined for single-family units, condos, and all properties entirely, median sales prices rose across the board.

So could a rise in sales prices and a decline in inventory be leading the lower sales activity? Absolutely.

While prices throughout Illinois, in general, are on the rise, it's only natural that homeowners would expect more for the sale of their home. And with a lower inventory, home buyers (especially, first-time home buyers), have more competition when it comes to landing that dream home. But there's a flip side as well.

Despite being a seller's market, first-time home buyers are dwindling as well. Nowadays, many are choosing to rent, at least in part, due to the unaffordability of homes. And when the Illinois' inconsistent housing market is brought up time and time again, it doesn't encourage support for home buying.

That said, Illinois, as a whole, is doing better for the year than it was during April 2016. In fact, 44,680 home sales were closed in April 2017, whereas April 2016 had 43,684. Overall, when it comes to the Chicago and Illinois housing markets, trends are bound to ebb and flow.

For additional questions pertaining to Cambridge Title Company, please call us at 224-330-1886 or email us at info@cambridgetitleco.com.

Cambridge Title Company: The Value of Two Locations

Many small business title insurance companies are limited to one location. While there's nothing wrong with that, a small business with multiple offices offers an intangible benefit to home sellers and home buyers. That's where Cambridge Title Company comes in.

Unfortunately, with larger organizations, they tend to have numerous customers. As a small business, Cambridge Title Company presents a private banking level of service to all of its customers. Basically, by working with our team, you can ensure that you'll receive the attention to detail that your closing deserves.

On top of that, you have the aforementioned benefit of two locations: an office in Northbrook and an office in Chicago. We understand that many people live out in the suburbs, thus our primary office is there. However, Cambridge Title Company also realizes that many people also work in Illinois' metropolitan area, Chicago. Add on that we'll work with our clients on weekends and after-hours and you have an extremely accessible title company as a partner.

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