Posts Tagged mortgage insurance
What is Title Insurance? What is Title Insurance used for?
Posted by Top Home Loans in General Business, Mortgage Advice, Mortgage News, Real Estate on July 1st, 2009
Title insurance is designed to provide comprehensive insurance against risks associated with home buying. Some of these risks associated with home buying include zoning issues, claims of mental capacity, lack of an up to date survey, incorrect legal services, and claims to title. It also insures against title defects that could occur. For example, there could be ownership claims, liens, undischarged mortgages, consents, and other related title issues. It will also cover compliance’s issues and issues with access. For example, some of these issues could include work orders, boundaries, tenancies, rights of way, and certain easements. This type of insurance will remain in force for as long as the purchaser owns the property. The title insurance will is also supposed to outlive the certification of your lawyer. Usually, insurances stop if the person who certifies the insurance passes away or stops practicing law.
The first thing to understand is that title insurance provides an insurance title. It does not provide a marketable title. This means that if something is wrong, and a prospective purchaser will not accept a new title insurance policy at no cost and provided the insurer does not go bankrupt. The insurer will either payout on the policy or will repair the defect to the title. Overall, it does not matter what the title says, as long as the home purchaser is willing to purchase title insurance coverage. Most people would rather purchase an insurance, then spend a lot of money completing a full assessment on the property. Most title insurance companies that operate in Canada have originated in the US. This assumes that there is plenty of demand for title insurance.
Title insurance can be a valuable and effective tool if used correctly; however, some companies deliberately and effectively try to persuade many peoples school of thought. By using some programs offered by lawyers and title insurance companies, it can literally save the home purchaser hundreds of dollars in closing costs. These costs can vary wildly between lawyers, so when asking about title insurance, make sure that you get a quote for both your lawyer, and the title insurance costs. Also, some companies claim to be ‘closing centers’. These companies will do only the bare bones work at a low price. Lawyers are usually cut a deal to sign there name on the bottom line. This is not correct because the lawyer actually needs to do there job correctly, instead of just getting paid to sign.
A great advantage of title insurance is in regards to older homes. Some older homes have been registered under the Registry System where a adjoining property search and a 40 year search to a good root of title is required.
In Ontario, the full electronic registry system will be the normal process. It is expected that title insurance will occur in all transactions, and will be completed by computer processing. When selecting a lawyer, make sure that they have completed all the required title insurance courses, have completed Terranet courses, and have a full working knowledge of the electronic registry system, so they can advise you correctly. A closing center does not have these details, so they cannot properly advise you. The Law Society had passed a rule that requires the lawyer to properly inform the home purchaser of all the details on title insurance, and how title insurance works. A lawyer will be able to refer back to you later and advise you if there is any trouble. Also, if you have found a good lawyer, then make sure that you refer them business. Referral business is how a lawyer survives.
The lawyer has the full responsibility to inform you of all the details involving title insurance. Make sure you choose a lawyer that is well informed on the topic, and make sure that they have all the necessary qualifications to complete your transaction as easily as possible. Consider your options carefully before coming to a decision on title insurance.
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How to get a Mortgage if you are Self-Employed
Posted by Top Home Loans in Credit Information, Mortgage Advice, Mortgage News on April 20th, 2009
For full-time employed people, it is easy to verify that you have the income available to make your regular mortgage payments. All you need to do is get your most recent pay stub and your most recent T4 and that is usually all you need; however, if you are a self-employed individual or a contractor, then proving your income could be a lot more difficult then you would think.
What Documents you Need if you are Self-Employed
When you are planning to apply for a mortgage and you are self-employed, then it is best to make sure that you have collected all the required documents before looking for a property to buy. The first thing that you need to know is that most lenders will average your last three years income. If you work for yourself, then you will need your last three years Notice of Assessments. The underwriter reviewing your income will average your previous three years income to determine your current income.
If you own and operate your own business, then you will need all your accounting documents, your T1 Generals, and your Notice of Assessments for the past three years to qualify for your mortgage. You will also need to provide statements of business activities. If you have the documentation showing the registration of the business, then you will have to provide this as well.
Once you have collected this documentation, the first thing you should confirm is that you have no outstanding taxes. If you have outstanding taxes, then the bank will consider this as a form of collections, and they will not be able to fund your mortgage until after you have paid off your outstanding taxes.
Most self-employed, contractors, and business owners gross down there income as much as possible in order to reduce there tax brackets. This could have a negative impact when trying to apply for a mortgage, and you may be unable to qualify for a mortgage.
What to do if you do not have Proof of Income?
If you do not have sufficient proof of your income or you have not been self-employed for long enough, then you may not have enough income in order to qualify for the mortgage. You may not have any income at all available to apply for the mortgage. Most mortgage insurance companies understand this, and they have developed insurance programs to suit these self-employed individuals.
For example, you have been self-employed for one year, and you have only been making 6 figures for one year. Before that you were barely making $30,000. The income that you have available is not enough to qualify for a mortgage, so you can use this program to qualify.
Also, if you are running a business, but you have not filled your taxes yet, then you may be eligible to apply for one of these programs. Another example is if you had grossed down your income way too much, and you are now unable to proceed with a mortgage.
What is the Premium of this Mortgage Insurance?
When you have no other choice, you may have to take this more expensive form of insurance. This insurance will run you a large premium over normal insurance, and could be more than double what the average mortgage insurance premium costs. Be prepared to hear a large number when you ask what the insurance premium is when you are using one of these programs.
If possible, then it is best to wait until you have sufficient income and sufficient proof of income in order to make the purchase because you may pay not only thousands, but tens of thousands of dollars in order to be able to purchase the home that you had be searching for.
Mortgage Life Insurance
Posted by Top Home Loans in Mortgage Advice, Mortgage Rates on November 3rd, 2008
When getting a mortgage, one of your most important responsibilities of the mortgage is making sure that your payments are made on time, every time; however, some things can occur in your life that will make this responsibility difficult. This is just one form of insurance that you should consider when purchasing your home. This type of insurance is very controversial, so we will discuss both sides of the insurance. The mortgage life insurance may be one of the most important decisions that you make when completing your mortgage application.
The Dark Side of Mortgage Life Insurance
When you first decide on your mortgage payment, the payment alone is a lot of money, not to mention all the additional fees you are required to pay. The insurance seems like an extra cost that you just do not need when the money is tight. Insurance also seems to find a way to not payout when you really need it. Also, I will never actually experience the benefit of what I am paying for because I will be dead when I get the benefit of the insurance. The insurance you could receive, you could just increase other insurances you may have to cover for the insurance and actually get a benefit out of it.
What it really boils down to, is that it is something that you pay too much money for that you will never use.
The Truth of Mortgage Life Insurance
There are many benefits of getting mortgage life insurance. They are as follows:
- Price – Mortgage Life Insurance is usually much cheaper then investing in regular life insurance. It is best used early in the mortgage when the mortgage is still large.
- Payout – Mortgage Life Insurance is much easier to apply for and be approved for then regular Life Insurance.
- Convenience – Mortgage Life Insurance can be applied to one applicant or multiple applicants. It can also be canceled at any time.
- Great Protection – It can protect you up to $750,000 in mortgage insurance protection.
- Fast Approval – By responding to a quick and easy one page application, then you can begin receiving immediate coverage without doctors appointments and other medical tests.
- Ease of Payment – The payments are made with your regular mortgage payment, so you will not have to worry about missing monthly payments and having your policy canceled.
- Saves you Money – Your policy rate will stay the same no matter how old you get. You don’t have to worry about your premium increasing, and you won’t have to take any medical tests.
- Fast Coverage – Your coverage is automatically approved as soon as you complete the application and it is accepted.
- Long -Lasting Coverage – You can have coverage on your mortgage up until the age of 70.
Mortgage Insurance is quick and easy coverage that allows you to have full coverage on your mortgage without having to worry about all the standard limitations of Life insurance. The benefits of life insurance could be different by the different companies that you use, so make sure that you research all the details of your insurance with your mortgage company before proceeding.
How to Optimize Your Insurance
There are many situations to optimize your Mortgage Life Insurance; however, you have to be able to recognize the situations in order to take advantage of them. First of all, if you are young, then you should definetly make sure to get coverage. This will ensure that as you age, you will keep the same coveage rate no matter how big the size of the mortgage is. It will also ensure that as you raise a family, then you will be able to protect your family from unforseen accidents. The second situation is if you have one primary income earner. If you have only one income earner, then you may want to consider having life insurance on the primary earner and not the non-earner. If the non-earner passes away, then the earner will still be able to make the monthly payments; however, if the earner does pass away, then their will be no one available to make the monthly mortgage payments. These are just a few of the many ways that you can use Mortgage Life Insurance to optimize your insurance plan.
Mortgage Life Insurance can be a great thing to inclue with your mortgage payment; however, you have to be able to recognize this oportunity ad make the necessary adjustments to your life to be able to include the life insurance premium. Make sure to think this over fully before deciding to say no to this coverage. This is something you will want to have.