Arnold
CibbuanoPurchasing a Property – Insurance
August 30th 2006 00:15
When you purchase a property there are several forms of insurance which may be necessary or suitable for you to pursuit. The two forms of insurance which are important for a home purchaser to consider are title insurance and mortgage insurance.
Title Insurance:
Title insurance is usually required by the lender to protect the lender against loss resulting from claims by others against your new home. The owner's title insurance will cover you if a problem regarding legal ownership arises that was not discovered during the title search. Say that the property you purchased was not properly listed in the title of the property and a portion of the property that you thought you were buying actually turned out to belong to a neighbour. Title insurance will cover the legal expenses associated in defending the title of your purchase. If you are applying for a mortgage, the lender or bank may insist that you take out a title insurance policy to protect their interests in the financial investment provided to you.
Mortgage Insurance:
Mortgage insurance offers financial protection to the bank or lender in the event of you not meeting your financial responsibilities when it comes to repaying a mortgage. Mortgage insurance only protects the lender so unless your financier insists on you taking out a mortgage insurance policy, there is no need for you to go to the expense of mortgage insurance. Mortgage insurance is also called a lender’s title insurance. It must be emphasized that it does not provide any protection to the property owner and it should not be confused with a home owner’s title insurance policy.
To summarise, when it comes to purchasing insurance, home purchaser should actively look for home owner’s title insurance. A lender’s title insurance may be required in order to get loan approval from your financial lender but it does not provide any legal or financial protection for the home owner. Furthermore, the previous home owner’s title insurance does not roll onto the new home buyer. The only way you can obtain protection should there be a problem with the property title is by seeking a specific title insurance policy for the new investment.
Title Insurance:
Title insurance is usually required by the lender to protect the lender against loss resulting from claims by others against your new home. The owner's title insurance will cover you if a problem regarding legal ownership arises that was not discovered during the title search. Say that the property you purchased was not properly listed in the title of the property and a portion of the property that you thought you were buying actually turned out to belong to a neighbour. Title insurance will cover the legal expenses associated in defending the title of your purchase. If you are applying for a mortgage, the lender or bank may insist that you take out a title insurance policy to protect their interests in the financial investment provided to you.
Mortgage Insurance:
Mortgage insurance offers financial protection to the bank or lender in the event of you not meeting your financial responsibilities when it comes to repaying a mortgage. Mortgage insurance only protects the lender so unless your financier insists on you taking out a mortgage insurance policy, there is no need for you to go to the expense of mortgage insurance. Mortgage insurance is also called a lender’s title insurance. It must be emphasized that it does not provide any protection to the property owner and it should not be confused with a home owner’s title insurance policy.
To summarise, when it comes to purchasing insurance, home purchaser should actively look for home owner’s title insurance. A lender’s title insurance may be required in order to get loan approval from your financial lender but it does not provide any legal or financial protection for the home owner. Furthermore, the previous home owner’s title insurance does not roll onto the new home buyer. The only way you can obtain protection should there be a problem with the property title is by seeking a specific title insurance policy for the new investment.
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