Closing Costs - Part II
Author: Pam Mason
How much can I expect to pay for title insurance?
This point is often misunderstood. Only a small percentage of the closing fees are actually for title insurance protection. The title insurance premium may amount to less than 1% of the closing cost. As in all competitive business environments, rates vary from company to company. So, you should make your comparisons before deciding on a particular company.
Title insurance is good for as long as you and your heirs own the property with the payment of just one premium.
What does title insurance cover?
Title insurance, unlike property or casualty insurance companies operates under the theory of ?risk elimination?. Risk elimination can only be accomplished after an intensive period of risk identification.
Trained title experts are able to identify the rights that others may have in your property, such as recorded liens, legal actions, disputed interests, right of way or other emcumbrances on your title. Before closing your transaction, you can seek to clear those emcumbrances which you do not wish to assume.
The goal of a title search is to do such a thorough search of public records that no claims will ever arise. Of course perfection is impossible so when a claim does arise, the title insurance company will make sure your property rights are protected according to the terms of your policy.
A title insurance policy represents protection for your ownership of real property.
Who can explain my specific closing costs to me?
Once the HUD Settlement State is issued, your loan officer normally reviews the figures with you so there are ?no surprises? at the closing table. Your real estate agent will also be reviewing the figures for accuracy.
Are Closing Costs all I will have to pay at the closing?
In addition to closing costs, you will probably have to pay some items that are often referred to as ?pre-paids? which includes items like prorated property taxes and homeowner?s insurance. Your loan officer and real estate agent will be able to explain your specific circumstance.
