The PMI coverage is supposed to drop off when the loan is paid down 20 percent. But recently, with lower interest rates, many homeowners refinance when they can show they have 20 percent equity. If home values are going up, that can happen quickly.
In addition to homeowners insurance and title insurance, the third important insurance product most homebuyers need is private mortgage insurance (PMI). As discussed in Chapter 2, this is a policy that protects the mortgage company from a buyer’s defaulting on a mortgage. Were it not for this type of insurance, investors wouldn’t invest the dollars [...]
When the owners were landscaping their backyard, a county parks employee came by to stake out the jogging trail, and told them they were encroaching on the future parkway. Understandably, the new homeowners were upset and they called their title company. Obviously, the title company made a mistake and the owners ended up with a [...]
In the case of the third purpose, above, at closing, both buyers and sellers pay for title insurance, for different reasons. On the seller’s side, a title insurance policy insures that the buyer has a good title. It’s charged to the seller on the closing statements, or HUDs, and you’ll find this charge in the [...]
In most states, home sellers are required to give you a title insurance policy that guarantees you’re getting a good and clear title with no problems to the home you’re buying. If title problems such as the forging of a deed, a lien from a divorce, a bankruptcy, or a boundary dispute anywhere along the [...]