Don’t Skip On Title Insurance
February 24, 2008
TYPICAL TITLE PROBLEMS
To close on a house, the buyer usually must have title insurance guaranteeing that he or she will be the sole owner.
Insurance companies refuse to provide that insurance in some cases. Here are common examples of why title insurance would be denied:
•Grandparents die without leaving wills, and one child keeps the home without proper legal documents. It’s not found until two generations later.
•The property description differs from the sales contract.
•The previous owner forged mortgage documents to show that he or she had paid off a previous mortgage. But the former mortgage company still owns the property.
Source: Alamo Title Co.
WHAT DOES TITLE INSURANCE COST?
The Texas Department of Insurance sets the same on-time premium rates for all properties, regardless of type of home, its age or where the house is located. The insurance policy must cover at least the sales price of the property.
The minimum premium is $229 for the first $10,000 in sales price. Premium rates are broken down into six tiers and get smaller as the purchase price increases to $25 million.
For instance, buyers pay the minimum rate plus an average of $3.41 for each additional $500 of the price, up to $100,000.
A home priced at $100,000 would have an $843 premium.
The premium for a $200,000 house includes the $843 from the first $100,000, plus $2.67 per $500 of additional value, or $1,377.
Source: Texas Department of Insurance
Read “Title insurance protects buyers” Written by Aïssatou Sidimé Express-News Business Writer
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