What do MI home buyers need to watch out for when purchasing a home, and reviewing their title?
Buying a home in Michigan is an exciting time. It can feel great to be finally laying claim to your own place, moving up, or securing a new investment property. Yet, there is a lot going on, and how secure that investment really is will depend a lot on your title and title insurance. Don’t be rushed in reading through all the documents and fine print. Make sure you know what you are getting, and not.
Type of Deed
There are actually various types of deeds that can be used to transfer property. A simple quit claim deed can be very different to others. It is important to know that you are being assigned ownership from the real and authorized seller. You also want to talk to your MI title insurance company to determine the best way for you to hold title. Will it just be you? Is it better to hold title in a company name or your personal name? Which is the best way to ensure your loved ones get taken care of if something happens to you?
What’s Covered, or Not?
When you apply for title insurance, or someone else does for you, you’ll get a title report showing liens, past ownership and potential challenges to your rights. It will list what is, and what isn’t covered by your insurance going forward. Typically, a good title insurance company will make sure you are well covered and that any questions about ownership are well wrapped up before your real estate closing. Though this isn’t always the case. Make sure you know what claims you are protected against, or not.
The Amount of Coverage
Know how much coverage you have, what you will get legal protection to defend against, or where there may be gaps.
If you are taking out a mortgage loan to buy a home in MI, you will typically be required to get title insurance to cover the lender. They want to make sure they are covered, and their investment and capital is safe. Note, that this doesn’t protect you. It may pay off the mortgage if there is an issue, or at least most of it, but you are not entitled to any payout as the owner. You need to also request a Buyer’s Policy if you want coverage for yourself. This is very inexpensive when getting a Lender’s Policy at the same time. Though you should get a Buyer’s Policy, even when it isn’t mandatory.
Make sure you know what your title documents really mean, and what your title insurance covers, before you close. Don’t be afraid to ask lots of questions. You’ll be glad you did later on.