146403
150254
The-Mortgage-Gal

Get title insurance

When you get down to the nitty-gritty of buying a home, you need to make a lot of decisions in a short time.

Regardless of how prepared you are, it can feel a little overwhelming.

One of the last-minute decisions you will be asked about is title insurance. This will be discussed with your lawyer or notary just before your mortgage finalizes, when you are signing your final mortgage documents.

Most lenders require that you purchase title insurance.

When I first started working on mortgages close to 30 years ago, lenders required clients to provide a survey certificate when they purchased a home. Usually a copy was available from the seller, or sometimes from the respective city office.

If there was not a copy available, clients would have to pay for a new survey to be done. In some communities, this could cost close to $1,000, so survey certificates were (for the most part) carefully kept for future use.

Over the years, this requirement has changed. Now, most lenders require title insurance in lieu of a survey certificate.

Title insurance is generally purchased at the time your mortgage closes. In B,C., for purchases under $1 million title insurance costs approximately $225.

There is a mandatory policy that protects your lender, and you are able to purchase a personal portion as well. The personal policy generally costs about $50-$75.

This is a one-time cost that is usually included in your final closing costs.

What is title insurance and why is it important?

Title insurance is designed to protect the lender (and you if you buy the personal policy) against title fraud and potential defects relating to the title of your home.

Some of the risks that title insurance protect you against include:

  • An unforeseen defect in your title ownership.
  • Negligence or errors made by your lawyer relating to title risks.
  • Unpaid utilities, mortgages, taxes or condo/strata maintenance fees – these are known as liens.
  • Fraud, survey or records errors.
  • A pre-existing outbuilding that must be removed because it encroaches on a neighbouring property.
  • The gap period between when a property purchase is finalized or closed and when the title is officially registered with the government.

Over the last week, I’ve had two separate calls with title-related questions. One of my clients in Northern B.C. has an accepted offer on her home.

While doing their due diligence, the prospective purchasers discovered an error in the property line.

They are in the process of trying to sort out whether the developer made an error in building the house or whether the city records are incorrect.

Either way, the client did purchase the optional title insurance, so based on her initial inquiry to the title insurance company, it sounds like her situation will be sorted out and any costs will be covered by the policy.

Another client ran into a situation where the home they bought had a shed built almost three feet over the neighbour’s property line.

They are in the process of finding out exactly what costs their title insurance will cover as the City has ordered them to tear down the shed.

COMMENTS WELCOME

Comments are pre-moderated to ensure they meet our guidelines. Approval times will vary. Keep it civil, and stay on topic. If you see an inappropriate comment, please use the ‘flag’ feature. Comments are the opinions of the comment writer, not of Castanet. Comments remain open for one day after a story is published and are closed on weekends. Visit Castanet’s Forums to start or join a discussion about this story.



More The Mortgage Gal articles

150255
About the Author

Tracy Head and Laurie Baird help busy families find mortgage solutions. Together they have more than 45 years of experience in the mortgage industry.

With today’s increasingly complicated mortgage rules, Tracy and Laurie spend time getting to know the people they work with and help them to better understand the mortgage process. They support their clients before, during, and after their mortgage is in place.

Tracy and Laurie work closely with their clients, offering advice and options. With access to more than 40 different lenders, Tracy and Laurie are able to assist with residential, commercial, and reverse mortgages in order to match the needs of their clients with the right mortgage package.

They work closely with their clients to find the right fit, and are around to provide support for years down the road!

Contact them at 250-862-1806 or visit http://www.okanaganmortgages.com

Visit their blog at https://www.okanaganmortgages.com/blog

 



The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

Previous Stories



150604