Many investors and home owners are convinced that paying for title insurance is totally unnecessary.
Here, we uncover the hidden truths with real-life examples of deals, voice our opinion, and let you be the judge.
Title insurance is provided by your local closing agent (either a Title Company or a Real Estate Attorney depending on your State or Province) to protect you from the eventuality that it’s discovered you may have a problem with your property after you:
a) Have closed and now own it, or
b) Have sold it to another party
What kind of problem could arise that you’d need title insurance?
Let’s take this example, say for instance that you bought a property from a family that lived in a home for two years. They had bought it from another family who’d built the house brand new.
But there’s a catch, you as the owner decide to dig up the backyard and put in a pool. All of a sudden, you find there’s a submerged 100 gallon oil tank buried in the backyard and it’s leaking into the soil.
You could be charged for the environmental damages and levied a hefty fine.
Thanks to the investor that had title insurance on this property, they saved a bundle.
There are two types of title insurance policies to buy in each transaction: one for the seller and one for the lender.
So is title insurance a rip-off, a scam, or is it necessary?
Well, title insurance policy claims are low so yes – the insurance companies do win. But you’re building a business that must be protected from unknown eventualities – like as if there was a submerged 100 gallon oil tank leeching into the soil that’s been unearthed after all these years.
Bottom line, it’s better to be safe than sorry…so pay the extra few hundred dollars to be on the safe side. Just one claim against you could quickly burn one heck of a hole in your pocketbook.
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Investors From Europe Buy Real Estate In United States
Many investor from europe and the uk are buying real estate in the united states.
I’ve interviewed a real estate agent in california a week ago and he was telling me how much the market was bad until he started to work with investors from europe and the uk.
“They just have a lot of money” he said.
“I met them during a spring brake in europe. I said to my self there is no work anyway so I will go and travel a little bit.
I think it’s the best vacation I ever had and it’s still continuing , the only difference is that now I’m actually making money”.
Investors don’t need any green card, good credit, bad credit or visa.
They only need to put a least 35% of the purchase price as a down payment.
These investors will get a higher interest rate and if they will put 50% as a down payment they will probably get a much lower interest rate.
Today the euro is much higher then the dollar.
So if the american investors are excited about the foreclosures can you imagine the europeans?
For the europeans everything is much cheaper than for americans, because the value of the euro as oppose to the dollar.
Can a foreigner really get a loan in america?
Sure they can get a loan, just like an american investor can get a hard money loan without showing any credit information, they just need to show interest. interest for a mortgage lender is measured with money. banks or hard money lenders will loan you the money but you will have to put as a down payment a big chunk of your money. Than you will not going to loose the property you’ve purchased and get the banks in trouble.
Also there are many banks out there that are selling their Loans or notes to foreigners just because they need to take some loans off of their shelves, just the way you’re trying to avoid foreclosure or trying just to sell the house.
Banks today have to deal with so many issues like foreclosures, bankruptcies, notes and money in general.
Most banks that have loaned money to borrowers in the past 3 years are not protected or insured.
Three years ago the bank started to loan 1st and 2nd mortgages, 2nd mortgages are the cause of them not having mortgage insurance. So because they don’t have mortgage insurance they will loose their money if a foreclosure is placed.
So why did the banks offered borrowers 2nd mortgages?
Because it was easy to qualify and a lot of borrowers tried to avoid refinancing their 1st mortgage.
Banks just wanted to make money and more money and that’s what they did.
Now the banks are not willing to Loan 2nd mortgages anymore.
Read other articles I wrote to learn more about mortgage insurance.
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