The FAQs of Title Insurance For Homebuyers

Published on Old Republic Title website

For most of us, a home is the largest investment we'll make in our lives. To buy with confidence, get owner's title insurance. It's the smart way to protect your property from legal claims. To help you understand how owner's title insurance works, here are answers to common questions.

What is title?

Title is your right to own or use your property. Title also establishes any limitations on those rights.

What is a title search?

A title search is an early step in the homebuying process, conducted of the public records, to uncover issues that could limit your rights to the property. If a title issue is discovered, most often your title professional will take care of it without you even knowing. After the title search is complete, the title company can provide a title insurance policy.

What is title insurance?

If you're buying a home, title insurance is a policy that protects your investment and property rights.

There are two different types of title insurance: an owner's policy and a lender's policy.

1. An owner's policy is the best way to protect your property rights. Either the buyer or seller may pay for this policy. Ask your title professional how it's handled in your area.

2. A lender's policy is usually required by the lender and only protects the lender's financial interests. The buyer typically pays for this policy, but that varies depending on geography. Ask your title professional how it's handled in your area.

Why should I purchase owner's title insurance?

Owner's title insurance protects your investment in your property from certain future legal claims regarding ownership of your property. For a one-time fee, you and your heirs receive coverage for as long as you own your home. The owner's policy also covers potential legal fees and court costs for settling claims covered by your policy.

What does owner's title insurance cover?

Sometimes undiscoverable defects can come up after the title search. Under an owner's title insurance policy, you are protected against certain undiscovered errors in the title.

Title issues include unknown:

• Outstanding mortgages and judgments, or a lien against the property because the seller has not paid his taxes

• Pending legal action against the property that could affect you

• Unknown heir of a previous owner who is claiming ownership of the property

Unforeseeable title claims include:

• Forgery: making a false document
  - For example, the seller misrepresents the identity of the person who sold the property.

• Fraud: deception to achieve unfair gain
  - For example, someone steals your identity and either sells your house without your knowledge or consent, or takes out a second mortgage on the property and walks away with the money.

• Clerical error: inconsistent paperwork and historical records
  - For example, an unforeseeable discrepancy in the property or fence line can cause confusion in ownership rights.

What does owner's title insurance cost?

The one-time payment for owner's title insurance is low relative to the value of your home.

How long am I covered?

Your owner's title insurance policy lasts for as long as you or your heirs own your property. Your life will change over time, but your peace of mind never will.

What happens at closing?

Closing is the final step in executing the homebuying transaction. It is the process that allows the transfer of ownership to occur. Upon completion of the closing process, you get the keys to your home!

Where can I get more information?

The American Land Title Association helps educate homebuyers like you about title insurance so you can protect your property rights. Check out www.homeclosing101.org to learn more about title insurance and the home closing process.

This advertising offers a brief description of insurance coverages, products and services and is meant for informational purposes only. Actual coverages may vary by state, or locality. You may not be eligible for all of the insurance products, coverages or services described in this advertising. For exact terms, conditions, exclusions, and limitations, please contact an Old Republic Title representative.

3 Fall Maintenance Tips to Protect Your Home's Foundation

Originally posted by The Founation Works

With temperatures as high as 100 degrees last week in the Los Angeles area, it’s hard to believe that fall is in full effect here in sunny SoCal. Some of us are still basking at the beach, while others are embracing the new season with pumpkin spice lattes in hand. Whether you’re still in flip-flops or already setting out holiday decorations, we thought it would be helpful to send you a few fall foundation maintenance tips before any rain kicks in.

1. Tackle Perimeter Drainage Issues 

We discuss the impact water has on your foundation on our website and explain how saturated soil due to chronic water intrusion can cause foundation issues. This year, we surprisingly received a lot of rain. In fact, the amount of rainfall we had in just the spring alone was 200% higher than the average year, according to an L.A.-based meteorologist. Because of this, the soil around your home may have experienced over-saturation and expansion, which can be troublesome for your foundation.

These dry weeks in October are the ideal time to take care of any perimeter drainage issues that could otherwise add to any over-saturation of the soil under or adjacent to your home. Not sure who to contact for drainage? Reach out to us and we’ll refer you to one of our vetted drainage specialists who have helped serve our clients over the years.

2. Install Rain Gutters or Have Them Cleaned 

If your home does not have gutters, we highly recommend getting them installed. Without gutters, water from the roof collects near the house instead of being directed away from it. This can lead to cracks and other damage to your home's foundation over time. If you already have gutters, the fall is a good time to get them cleaned if you have not done so already. Clogged rain gutters will not work as efficiently, so getting them professionally cleaned will work in your favor. Lastly, you can opt to have your rain gutters extended with downspouts to further help channel rainwater away from your home and its foundation. 

3. Re-slope Soil Away from Your Foundation 

Having a completely flat yard may look nice, but it can lead to drainage issues that harm both your lawn and your home's foundation. Even worse, if your lawn slopes towards your house, water can gather around it. Ideally, your lawn should have a gentle slope away from your home's foundation. Some DIYers may be able to re-slope their soil themselves, but we suggest consulting with a professional to make sure it’s done correctly and to safeguard your foundation against water damage, preventing potential cracks. 

Best Practices for Using Storage to Organize a Home

By: Barbara Ballinger posted on Realtor.com

3 Key Takeaways:

• Storage options should reflect a homeowner’s needs

• Make sure to include storage options in every room

• Keep storage placement, pricing and ease of use in mind

New homes are shrinking in size and storage space, and older homes have their share of storage woes as well, which makes it difficult for homeowners to keep their homes tidy and organized.

Though many homeowners in recent years have latched onto the decluttering philosophies of Marie Kondo and Swedish Death Cleaning, some didn’t organize and store what was left, leaving them with piles. Moreover, most homeowners continue to buy, making it unlikely that their rooms will have space for everything.

Designer Jacob Laws of Jacob Laws Interior Design and his partner know the trials of limited storage space. They own an early 1800s home in Charleston, S.C., and intentionally limit their possessions to ensure it stays tidy. “But it’s easier for us,” he says. “This is what we do professionally.”

The good news is that everyone from home builders and architects to professional organizers and designers are swooping in to help.

Commercial interior designer Mary Cook of Mary Cook Associates, who advises homebuilders, is seeing bigger closets emerge. Jeff Benach, principal of Lexington Homes, has altered the angle of a staircase in one townhouse model to accommodate a second hall closet and also angled the garage to make its ceiling higher to fit more storage. Wingspan Development Group offers extra closets as options in some of its multifamily units, including walk-in styles and pantries off kitchens. Many pros such as salesperson Aleks Videnovic of Compass, a founder of StageIT.site and RenderPRO.io, make visualizing possibilities easier with renderings.

Fall is a good time to encourage clients to organize their storage, and a few best practices can help so the task doesn’t become overwhelming. Doing so also helps when they sell since well-planned storage shows buyers how their houses can work efficiently, says Allison Bond, a salesperson with Cummings and Co. Realtors, which is headquartered in Maryland.

Best Practices

Before organizing, homeowners should declutter, basing their decision on the traditional rule of if something hasn’t been used in three to five years or offers great sentimental value, it goes.   

Figure Out How and Where

Every homeowner should factor in how long they hope to stay since built-ins, including closet systems, can be more costly than many freestanding furnishings, which may be transported to a future home. “Live in your space for a few months before you commit to any storage investment,” Laws says.

The best questions for homeowners to ask themselves, says architect Bob Zuber, AIA, principal at Morgante Wilson Architects, are: What am I storing? How accessible does it need to be based on frequency of use? Does what’s being stored involve special considerations such as temperature control?

Trends come and go. Big entertainment centers and armoires are passé while “Costco Closets” in suburban homes for bulky items are now in, Cook says.

Any systems installed should be adjustable whether shelves in a bookcase or clothing rods in a closet since needs change.

Keep It On Brand, But Not Personalized

Storage should reflect a home’s design style and price point, which means more expensive wood shelves rather than wire in mid-priced to luxury homes.

Think carefully about which materials to use. In general, metal costs more than wood, except for exotic species; stained wood is more expensive than painted; and melamine and similar materials are the least expensive yet still very durable, says designer Rebecca Pogonitz of GoGo Design Group. Wood offers the advantage of being able to be customized, says designer Suzan Wemlinger, principal of Suzan J Designs.

Homeowners should avoid over-personalizing storage unless what’s stored warrants extra expense. This rule may apply to a fine wine collection in a custom cellar. An alternative is a refrigerated wine cooler that can be taken to another home.

Keep the Space in Mind

Storage should never be placed so it blocks doors, windows, furnishings and traffic flow; its purpose is to support daily life rather than make it harder.

Future needs should be considered by not filling up every storage option. That happened during the pandemic when many homeowners hunted for space for a home office. Some found it by converting an extra closet into a functional cubicle.

Off-site public storage should be avoided when possible since it’s costly and often becomes an excuse for delaying decluttering, says Videnovic.

Every room should have some storage. “People will notice if there’s none,” says Amanda Wiss, a stager, organization expert and founder of Urban Clarity.

Real (Estate) Talk

Buying a home is one of the best ways to invest in your future, build equity, and create a space that’s truly your own. But let’s be real: The process is intimidating! We asked REALTORS , members of the National Association of REALTORS , to give us real talk about buying your first home, whether you’re still saving for a downpayment or ready to make an offer.

Click on this link to learn more: Apartment Therapy

NAR Is Making the REALTOR® Voice Heard on LLPAs

Fee changes announced by Fannie Mae and Freddie Mac lead to both legitimate concerns and misunderstandings.

First published on Realtor Magazine. Article written by Stacey Moncrieff Executive Editor, Publications

Beginning May 1, some Americans will see higher fees on their mortgages while others will see fees reduced or eliminated. These changes to the so-called loan-level price adjustments—or LLPAs—have caused consternation in the industry. And in the week leading up to their effective date, National Association of REALTORS® advocacy staff have been busy both clearing up misunderstandings and reassuring REALTORS® that their concerns are being heard.

LLPAs aren’t new. These borrower-specific fees were instituted in 2008, on top of the base guarantee fee that borrowers pay. Over the years, there have been multiple changes to LLPAs, and the National Association of REALTORS® has regularly lobbied against adverse impacts on borrowers, including on these latest changes. According to an analysis by Experian, the latest LLPA changes will result in higher fees for consumers doing cash-out refinances and those with high-balance adjustable-rate mortgage. Mortgage News Daily reports that most borrowers who put down between 5% and 25% and have credit scores greater than 680 will also see a fee increase but will still pay less overall than lower credit borrowers. (In the article(link is external), author Matthew Graham provides a handy chart that shows how LLPAs are applied based on FICO score and LTV.) In addition, 2022 changes that reduced or eliminated fees for first-time homebuyers and those with low or moderate incomes will become permanent. And many borrowers with lower credit scores but strong down payments will see reduced fees.

Critics have said the changes amount to a penalty for those who have maintained high credit scores. However, at a housing policy forum hosted by NAR in April, FHFA Director Sandra Thompson indicated that “there was no uniform targeting of a borrower with a higher LTV for a lower.” While supporting some of the changes, NAR has consistently said that Fannie Mae and Freddie Mac have the wherewithal to lower fees for lower-wealth borrowers without increasing fees for those with greater wealth. Furthermore, supporting both groups dovetails with their congressional charter obligations and their function as market utilities.

However, some of the criticism of the new LLPAs has mischaracterized the changes, according to NAR. For example, one commentary said the changes amounted to “leveraging high-risk loans to people without the ability to pay them” and compared the changes to policies that led to the 2008 financial crisis. “That's not accurate,” says Ken Fears, NAR director of conventional housing finance and valuation policy. “Every loan financed by the GSEs must comply with the Ability to Repay Rule, put into effect after the financial crisis, which requires that borrowers be able to afford the payments for the first five years based on their income,” he says. Furthermore, while some fees will change, the fees paid by lower-credit borrowers will still remain higher than those of borrowers with stronger credit.

When FHFA announced the changes in January, NAR released a statement saying it supported adjustments that reduced costs for some borrowers but had concerns about increases for other borrowers. “In the wake of a three-percentage point increase in mortgage rates, now is not the time to raise fees on homebuyers,” NAR President Kenny Parcell said in the statement.

NAR Chief Advocacy Officer Shannon McGahn says the association will continue to make its voice heard on the issue of mortgage fees. REALTORS® will be meeting with Washington legislators and policymakers during the May 9 REALTORS® National Block Party(link is external) at Nationals Park. The block party, part of the REALTORS® Legislative Meetings, will also be the national stop of NAR's Riding with the Brand tour.

How New Pricing Model Affects Loan Fees

Closing costs are an unavoidable part of the mortgage process. But as of May, some of those costs may change and even increase for some homebuyers and refinancers.

This is due to recent changes made by the Federal Housing Finance Agency to its pricing framework, which will affect the upfront fees that come with conventional mortgages (but not FHA, VA, or USDA loans).

If you're considering a conventional loan for your home purchase or refinance this year, here's what the changes mean for you:  

1) Higher-credit borrowers may see more variance in fees. 

Previously, borrowers with credit scores over 740 saw the same pricing. Now there will be added brackets with varying fees for those with scores between 750 and 759, 760 and 779, and 780 or higher.

2) Lower-credit borrowers won't be penalized as harshly. 

With the old pricing arrangement, borrowers with a score of 639 or lower paid fees as high as 3.75%. The new arrangement reduces the maximum fee to 2.875%.

3) Cash-out refinancing may get more expensive.

The highest fee for cash-out refinances was previously 2.125%, but it will now exceed 5% for some borrowers.

4) Buying a multi-unit property might be cheaper. 

The fees for purchasing a two- to four-unit property range from 0.0375% to 0.625% under the new pricing model, whereas the fees were previously 1% across the board.

The new fees can be complex, and they vary based on the size of your loan, your credit score and your down payment.First published on Toufiq Moosani - Napa Finance (The Mortgage Gurus)

Prequalification Versus Preapproval

First published on Toufiq Moosani - Napa Finance (The Mortgage Gurus)

When you start researching to buy a home, you’ll see the terms “mortgage prequalification” and “mortgage preapproval” thrown around a lot. 

While they sound similar, they aren’t the same — and they serve different purposes in your homebuying journey.

Thinking of making an offer soon? Here’s what you need to know about prequalification versus preapproval and when they’re needed. 

Prequalification

Getting prequalified can give you a rough idea of how much you can potentially borrow, which makes it ideal for the initial stages of your home search. It’s a relatively quick and easy way to figure out what your budget should be and learn more about what financing options are available to you.

You’ll need basic details like your income, price range and credit score. This information is quickly screened, which makes the process faster and simpler than preapproval.

Many sellers will also accept prequalification in your offer, and it is often mentioned as a minimum requirement for offers. But it may be less appealing if the seller gets offers with preapproval letters.

Preapproval

A preapproval is much more official and involves a thorough verification process. You’ll need to provide more information regarding your finances and employment, including important documents like tax returns. The lender will also do a hard credit check, which can impact your credit score.

It’s optimal to obtain a preapproval letter before you make an offer. It’s not necessary to obtain prequalification until you’re seriously considering a specific property for sale, but it’s best to start gathering the information you’ll need beforehand so you can receive your letter in a more timely manner.

Preapprovals give sellers more confidence, as it shows you’re serious about the purchase and financing isn’t an issue for you.

2023 Design Trends

originally posted by Aspire Los Angeles

Bold Colors

Painting your home is one of the easiest ways to transform your space. You can influence the flow, aesthetics, and emotions. 

Each year, top paint companies such as Behr and Sherwin Williams share their predictions for which paint colors they believe will be big in 2023, and this year, color is in, particularly earth tones of browns and pinks. 

Pantone’s color of 2023 is Viva Magenta. "As virtual worlds become a more prominent part of our daily lives, we look to draw inspiration from nature and what is real," said Leatrice Eiseman, executive director of the Pantone Color Institute.

Other nominated colors are Terra Rosa by Dunn Edwards, Redend Point by Sherwin Williams, and Blush by Benjamin Moore. To see a full breakdown of the 2023 paint colors, keep reading this article. 

Wallpapered Rooms

Similarly, with the resurgence of color, you can expect to see more wallpapered rooms. A powder room is an ideal space to experiment with wallpaper and bold colors. 

According to Klarna, an online shopping and payment service, their data shows that two of their top trending items are jewel tones and patterned wallpaper. 

Natural Stone Finishes 

As we’ve already mentioned, 2023 design trends are moving away from sterile white or gray kitchens and more towards warmer neutrals and bold colors. 

We are seeing that trend continue with a growing resurgence in natural stone finishes. One interior designer predicts, “Some of the most popular stone elements include travertine, marble, exotic slabs of granite, soapstone, limestone, and other natural materials.” 

Separate Dining Rooms

While the feeling of openness in a home will never go out of style, oversized living areas are losing their appeal. 

This need for separated spaces especially became apparent with the rise of working from home, Zoom calls, and Covid. 

Many experts are predicting that separate dining rooms will make a comeback. What are your thoughts on this?

Our thoughts on 2023 design trends

Whether or not you follow the 2023 design trends is up to you. Your home is your refuge, and whatever you decide should make you happy. 

It’s important to remember that trends are just that, trends. Like the fashion industry, interior design cycles through different design trends every few years. 

If you are interested in exploring the 2023 design trends in your space, consider bringing in a realtor or an interior designer to help guide you on worthwhile design decisions that will help you add value to your home in the long run.

Another way to dip your toes in is to experiment with trends in a small way. Incorporate colored wallpaper into your powder room, layer colorful pillows and throws on your couch or bed, and invest in beautiful clay pots or other decor items that remind you of natural stone. 

Happy designing!