A Simple Guide to VA Loans

In addition to the many civilian loan options on the market, there is one lending opportunity that only military service members can take advantage of, which is a government loan backed by the Department of Veteran Affairs (“VA”). Even with an imperfect credit score, active service members, veterans, and surviving spouses can qualify for this loan category. 

The main benefit of this loan is that the VA will guarantee the loan and will pay the lender a certain percentage of the principal in the event of default. Here’s a breakdown of the types of VA loans and information on who qualifies:

Types of VA Loans

The VA Cash Out Refinance Loan allows borrowers to replace their current loan with a new one under different terms. You can take case out of your home equity or refinance a non-VA loan into a VA-backed loan.   

A VA Purchase Loan is similar to a standard mortgage. If you choose this option, you’ll be able to buy a property with no down payment. Specific terms may differ according to the lender. 

The VA Native American Direct Loan (NADL) is designed for Native American veterans or veteran spouses of Native Americans. It allows borrowers to purchase, construct, or renovate a home on federal trust land. 

Who Qualifies? 

VA Loans have no down payment, less strict credit requirements, and are available to service members, veterans, and military spouses who meet one of the following conditions:

 - Borrower has served 181 days of active service during peacetime

 - Borrower has served 90 days in active service during wartime (consecutively)

 - Borrower has served 6 years in the National Guard or Reserves

 - Borrower has served 90 days in the National Guard or Reserves under Title 32, with at least 30 consecutive days served. 

 - Borrower is a spouse of a service member who died in the line of duty or because of a disability from their service.

To prove that you are eligible, you’ll need to obtain a Certificate of Eligibility (COE) that connects to proof of your service. The VA’s eBenefits portal allows you to apply for this online. For surviving spouses, you can find more information on what you’ll need to do to get a COE using this information available on the VA’s website.

If you have any questions about VA loans and eligibility requirements, call us at (504) 581-6427. Homestead Title is a full-service title and escrow company. Since 1934, we have provided our customers with competent, thorough, and professional service. Before each closing, we search public records to clarify legal and financial risks for lenders, realtors, and other stakeholders in the real estate transaction process. Our energetic and capable team of real estate title professionals provides accurate investigations, rapid turnaround time, streamlined paperless delivery, and exceptional customer service. 

Keep an Eye on These Trends When Investing in Real Estate in 2022

A global pandemic and economic woes have slowed everything down except the housing market. CNBC reports that during Spring of last year, sales of homes dropped from an estimated 4 million properties sold between March and May and have now there is a need for nearly 7 million homes before the end of the year. The problem is, you can't count on today's gains as an investor, as things can quickly turn for the worst at any moment. However, there are a few trends worth watching to help you strategize a way to protect best and maximize the return from your investment.

Mortgages are Currently Easier to Secure

It may seem like a contradiction during national economic issues, but mortgages are easier to secure. Mortgage credit availability was up 3.9% increase between July and August of 2021. Lending standards have become laxer, allowing even those with unsatisfactory credit to take advantage of an investment loan

When mortgage rates are low and stable, the real estate industry gets a jumpstart. Though this trend could end at any moment, mortgage interest rates are also at all-time lows, as significant elections, even a year from now, have this effect. The Mortgage Reports organization cites that the average rate on a 30-year, fixed-rate mortgage was just 2.74% in January, up from 3.62% in 2020 and 4.76% a decade prior.

Looking to Manage Property? Rent Payments at All-Time High!

If you have the start-up capital, the time to become a property owner and landlord is now. With the eviction moratorium in the past, prospective renters have reached record numbers. Alongside housing prices, rental prices have been climbing, too. The Department of Housing and Urban Development reports that the average rental price for a place has increased 32% since 2010. With housing prices more expensive than most goods, it might be a lucrative idea to offer some amenities (in-unit laundry, appliances, utilities, etc.) to hook a renter who might otherwise be skeptical about the rental price. 

 Worried About Market Volatility? Rest Assured! 

Real estate rises and falls in a cycle. As we saw with the housing crash in 2007-2008, there are some busts and booms. Fortunately, most experts wouldn't label this close to another crisis just yet. Though we are in a recession, there are several differences in today's housing market versus the past.

Property owners usually are clocking large amounts of equity. Homeowner equity has jumped by $1 trillion in one quarter, and according to recent data, barely 3% of properties hold negative equity. If someone's extra nervous about buying, then the equity that protects borrowers if their homes inexplicably lose value is going to give them some breathing room until the market moves back.

Homestead Title is a full-service title and escrow company. Since 1934, we have provided our customers with competent, thorough, and professional service. Before each closing, we search public records to clarify legal and financial risks for lenders, realtors, and other stakeholders in the real estate transaction process. Our energetic and capable team of real estate title professionals provides accurate investigations, rapid turnaround time, streamlined paperless delivery, and exceptional customer service. For more information, call us at (504) 581-6427 and let us provide you with a smooth and efficient real estate closing. 

5 Reasons to Love Your Title Company

5 Reasons to Love Your Title Company

The best title companies know how to make the experience of purchasing a home informed and efficient. Their services affect everyone involved in the transaction, making lives easier for buyers, sellers, and agents. 

Here are some added benefits that great title companies offer: 

1. Your Closing Will Run Smoothly From Start to Finish

Doing everything yourself when preparing for a real estate closing can feel like a nightmare. Nearly every step of the way, an experienced title company will ensure your closing is efficient and stress-free. 

2. All local and state regulations will be met

One of the most significant headaches when dealing with a property is meeting the compliance of local and state regulations. Great title companies keep up-to-date with the latest changes to requirements and update their procedures to serve those changes. 

3. You will have an attorney present at your closing

When you have a Real Estate attorney at your closing, you can ensure that all documents are in order and that any title issues that come up will be dealt with immediately. 

4. The escrow process will be seamless 

The more experienced title companies utilize a quick and effective escrow transfer process, including a simple system and timeline to approve and transfer funds. You want to ensure that your financial data is secure, as network security is a priority during escrow. 

5. Every detail will be triple-checked  

You know the expression “a fresh set of eyes?” Trying to close on a property can leave you overloaded, anxious, and more prone to overlook specifics. You can rest assured that any documentation, forms, or other fine print have been triple-checked when you hire a title company. Title companies that excel at their job ensure that mistakes are avoided as well as costly delays. You can rely on their detail-oriented service. 

At Homestead Title, our customers love us because, since 1934, we have provided our customers with competent, thorough, and professional service. Before each closing, we search public records to clarify legal and financial risks for lenders, realtors, and other stakeholders in the real estate transaction process. Our energetic and capable team of real estate title professionals provides accurate investigations, rapid turnaround time, streamlined paperless delivery, and exceptional customer service. And, unlike many title companies, we have an attorney present at every closing. For more information, call us at (504) 581-6427 and let us provide you with a smooth and efficient real estate closing.

What Are Construction-To-Permanent Loans?

Ready to design and build your dream home? A Construction-to-Permanent loan may be right for you. Essentially, it’s a three-stage mortgage that covers all of your new home’s construction costs. The Construction-to-Permanent (CP) loan allows you to lock in your interest rate and close the loan before you begin work on your home. When the project moves to construction, the bank disburses the loan to cover the cost, and the borrower pays interest on the outstanding balance. After construction, the loan becomes a permanent mortgage, and monthly payments begin.

 Here’s how CP loans work, step-by-step:

Application

A Construction-to-Permanent Mortgage Loan Originator (MLO) will go over several CP loan options with you and gather any appropriate documents needed for the application. They will submit the application on your behalf, and the MLO will let you know when the bank reaches a decision.

In the Meantime

There are several steps in the application process. One crucial step is the builder review. The bank may want to review the builder and their contract, which can affect their decision to issue the loan. The builder will need to sign a standard Construction Loan Agreement with the bank, which states the bank’s position on the funds available for construction. Also, a licensed real estate appraiser will look over your plans, specifications, the property itself, and any recent sales of homes like yours on the market and use this information to determine an estimated value of your home. During this stage, your builder, the bank, and yourself will need to agree on how loan disbursements and draws will be made in the form of a Draw Schedule. The bank will work with a closing agent of your choice to make sure the title on the property is clear and then move to close.

Disbursement

If approved, the bank will require an inspection before each disbursement to determine if the necessary work has been completed on the project. You’ll order an inspection by contacting your bank’s Paralender, who will then call a local inspector to look over the amount of completed work based on the draw schedule. Funds go toward labor completed and material installed.

Conversion

“Conversion” refers to the construction phase of your loan moving to the permanent stage. Costs that may be due at this time include the initial escrow of prepaid items such as homeowners’ insurance and taxes, prepaid interest for the permanent phase, unpaid interest on the construction phase, and other title insurance fees. Regular mortgage payments begin after the loan has been converted.

Potential investors and buyers shouldn’t feel intimidated by this process. Regions Bank recently collaborated with Built, a payment technology firm and construction finance software specialist. Built seeks to simplify the administration of Construction-to-Permanent loans by using a cloud-based portal that synchronizes the builder, inspector, and lender in one place. Using the platform, builders and developers can view availability, ask for inspections, review business analytics, and inspectors can submit reports about construction progress from the site, which speeds up the funding process. “Built is an online platform that makes it easy for the clients to order inspections when they are ready for them and to request draws,” said Nicole Dupre, Mortgage Loan Originator at Regions. “It’s a place that builders and homeowners can come to view the status of the project at any time.” Since its launch, Built has helped clients decrease their turnaround times by over 50%. 

If you have any questions about Construction-to-Permanent loans and want to find out how we can help you reach your homeowning goals, call us at (504) 581-6427. Homestead Title is a full-service title and escrow company. Since 1934, we have provided our customers with competent, thorough, and professional service. Before each closing, we search public records to clarify legal and financial risks for lenders, realtors, and other stakeholders in the real estate transaction process. Our energetic and capable team of real estate title professionals provides accurate investigations, rapid turnaround time, streamlined paperless delivery, and exceptional customer service. 

Understanding Homestead Exemptions and The Appeal Process

In Louisiana, we have Homestead Exemptions, a tax exemption on the first $75,000 of a person’s home value. This exemption applies to all homeowners. The value of your home is exempt up to $75,000 from state and parish property taxes. Here are some frequently asked questions:

When Should I File A Homestead Exemption Application? 

To qualify for homestead exemption, one must own and occupy the house as their primary residence. Regardless of how many homes are owned, no one is entitled to more than one homestead exemption, a maximum of $7,500 of assessed value. If you change primary residence, you must notify the assessor. 

After your real estate closing, your title company will file your act of sale in the Parish Clerk of Court office. It is advisable to go to the assessor’s office and apply for homestead exemption as soon as you purchase and occupy your home. Take your executed Act of Sale to the Assessor’s Office along with a form of identification, and they will take care of the rest. In several parishes, you can even file for a homestead exemption online

If you can’t or forget to file right after closing, don’t fret, you can do it at any time. We recommend doing it as soon as you purchase so you don’t forget. Remember, this is a significant tax saving for you. On average, the savings is $700-$800/year.

Regardless of how many houses are owned, no one is entitled to more than one homestead exemption, a maximum of $7,500 of assessed value. To qualify for homestead exemption, one must own and occupy the house as their primary residence. If you change primary residence, you must notify the assessor.

Special Assessment

A Special Assessment applies to the homestead of a person who is 65 years of age and older if the adjusted gross household income is below a certain level. The level may change from year to year, so we advise that you check with your assessor’s office to determine whether you qualify. This special assessment will freeze the assessed value of the homestead for as long as the applicant owns and resides in the home and income does not exceed the maximum allowed. This Special assessment level is lost if improvements over 25% of the home’s value are added. Proof of age and income is required when the application is signed. The freeze extends to a surviving spouse at least 55 years of age and meets all other qualifications.

How is Your Property Assessed? 

To find the value of any piece of property, the assessor must first know:

• the selling price of similar properties

• the cost to replace it today

• how much it takes to operate and keep it in repair

• what rent it may earn

• many other economic factors affect its value, such as the current interest rate charged for borrowing the money to buy or build similar properties.

What Causes Property Values To Change? 

A property’s value can change for many reasons. The most obvious reason is that physical changes may have been made to the property, such as additions, improvements, or significant damage. The most frequent cause of change in value is a change in the market. The assessor does not create value—the value of property increases or decreases based on transactions in the marketplace. 

When Should I Discuss My Assessment with the Assessor’s Office? 

From August 1st through September 15th, the assessment rolls are open for public inspection. During this time, you can discuss the assessment of your property with the assessor’s office. You have the right to file a protest of the evaluation if you cannot reach a settlement with the assessor. 

Many taxpayers wait until the tax bills are sent each year to discuss their assessment. The assessor will discuss your assessment at that time, but a property owner cannot legally file a protest.

How do I appeal to the Louisiana Tax Commission? 

To appeal to the Louisiana Tax Commission, a taxpayer must start at the parish assessor’s office. During 15 days between August 1st and September 15th, the assessment lists of each parish are open for public inspection. During this period, taxpayers should check the values on their property. Suppose there is a disagreement, and the taxpayer wishes to protest the value. In that case, the taxpayer must at that time fill out a form “Notice of Appeal Request For Board of Review” (Form 3101) and schedule an appearance before the parish Board of Review for hearing(s) held for this purpose.

The Board of Review office in your parish will determine if any changes should be made to the assessment values in question. Suppose either the assessor or the taxpayer is not satisfied with the determination of the Board of Review. In that case, either may obtain from the Board an Appeal Form (Form 3103A) for further review by the Louisiana Tax Commission. The Louisiana Tax Commission will consider any appeals timely filed in hearings open to the public.

Those considering appeals are encouraged to consult the assessor, parish board of review, and the Louisiana Tax Commission for specific procedures, dates, times, and places of all hearings.

What Are My Rights and Responsibilities? 

As a property owner, your rights include knowing how the assessor arrived at the values placed on your property. You have the right to look at the public records and ask questions. If you disagree with their findings after discussing values with the assessor, you have the right to appeal to the Board of Review of your parish and then to the Louisiana Tax Commission. As a property owner, you are responsible for seeing that all taxes on your property are paid promptly. You should check with the assessor’s office to determine if you are eligible for exemptions or special assessments. 

Homestead Title is a full-service title and escrow company. Since 1934, we have provided our customers with competent, thorough, and professional service. Before each closing, we search public records to clarify legal and financial risks for lenders, realtors, and other stakeholders in the real estate transaction
process. Our energetic and capable team of real estate title professionals provides accurate investigations, rapid turnaround time, streamlined paperless delivery, and exceptional customer service. For more information, call us at (504) 581-6427 and let us provide you with a smooth and efficient real estate closing.

Investing in Distressed Communities Through Louisiana's Opportunity Zones

Established by Congress in the Tax Cuts and Jobs Act of 2017, Opportunity Zones are a community development program. This new federal capital gains tax incentive program is designed to drive long-term investments to low-income communities. The new law provides a federal tax incentive for investors to re-invest their capital gains into Opportunity Funds, which are specialized vehicles dedicated to investing in designated low-income areas.

Eligible taxpayers who invest capital gains into a Qualified Opportunity Fund (QOF) can defer paying federal capital gains tax until the QOF is sold or exchanged, or until December 31, 2026.

To qualify for deferral, capital gains must:

• Be invested in the QOF within 180 days from the sale of an asset

• Be an equity interest (not a debt interest)

• Elect deferral by filing the appropriate tax forms the year the gain would otherwise be included as income

Investors can receive up to three primary tax benefits for investing capital gains into a QOF:

• Temporary Deferral – The tax payment is deferred until the investment is sold or exchanged, or until December 31, 2026 (whichever comes first).

• Partial Exclusion – If the QOF investment is held for longer than five years, there is a 10 percent exclusion of the deferred gain. If held for more than seven years, the exclusion becomes 15 percent.

• Elimination – If the QOF investment is held for at least 10 years, the investor has the potential to eliminate any tax payment.

According to Louisiana Economic Development (LED) 150 census tracts in Louisiana that are qualified opportunity zones. These low-income tracts were nominated by Gov. John Bel Edwards and certified by the Secretary of the Treasury.

Louisiana’s 150 tract recommendations were determined based on a strategic review of feedback from local, state and federal elected officials; economic and community development organizations; private developers; private equity firms; non-profit organizations; churches; and individuals. LED’s extensive review and comprehensive analysis considered the following factors:

• the potential for development based on known certified sites, tracts of land, or buildings within the eligible census tract

• proximity to regional assets (ports, airports, industrial parks, tech parks, colleges and universities, etc.)

• opportunities to leverage other designations such as NMTC or Enterprise Zones

• that coverage included a mix of tracts - some with high potential for economic development and others with high potential for community development (e.g. affordable housing, redevelopment, mixed use real estate, and any other types of quality of place enhancements)

• the end goal to ensure a fair and balanced distribution of zones across each of the eight economic development regions of the state

• the end goal to ensure adequate coverage in both rural and urban areas.

  As with any real estate transaction, title and closing services will be essential to these properties. Homestead Title is ready to assist investors with their title and escrow needs. To find out more about our title insurance and closing services, call us at 504) 581-6427.
  

Yes, An Owner's Title Policy is the Best Way to Protect Your Home!

Though your first reflex may be to brush off buying an owner's title policy as you navigate your new home purchase, you should reconsider. Yes, you have your money and time tied up in so many other things that come with buying a house, but title insurance can protect all of the money you've put into the investment. 

"I don't want to spend extra on title insurance. What's the Big Deal?"

The big deal is that you may not know how title insurance works in the first place and may severely miss out on its benefits. Your mortgage lender's title insurance does not cover you. Also, title insurance isn't a recurring monthly payment but a one-time payment paid at the closing of your home buy. From then on, you're fully protected. 

The highest risk for buying a home without title insurance is the possibility of claims that may appear due to any issues with the deed. These claims range from the discovery that an owner didn't report the complete picture of the financials on one end and the surfacing of a forged deed on the other. Unknown heirs who hold previous claims can materialize to challenge ownership, not to mention any liens that may not have been appropriately reported. 

 "So What Do I Do?"

Take Title Insurance into serious consideration. Peace of mind aside, you will have your legal fees covered in the unfortunate event of legal challenges, and if the claim succeeds, then it provides a net to hold back any loss on your investment. Homestead Title is known for its guidance unique to each client and facilitating the particulars of purchasing title insurance and every other step of closing on a property along the way. We understand that buying a home is an anxious, confusing journey, and we're here to offer our expertise. If you'd like to discuss title insurance for your upcoming home or property purchase, reach out to schedule an appointment or call (504) 581-6427 to discuss your options. 

Understanding Louisiana Property Tax and Tax Credits

Paying your property tax can become so routine that you pay it without questioning it. However, it is important to know how your property taxes are calculated. 

Property tax is calculated by taking the mill levy for the property and multiplying it by the property's assessed value. A mill levy (or millage rate) is determined in "mills" (one-tenth of a cent) and is the tax rate for your property. You can find the mill rate for your property on your tax bill or by contacting the local assessor's office. A mill levy = one dollar per $1,000 of the assessed property value, so a state school mill levy of 25 mills would equal 2.5%. The levy is calculated on a local government level based on revenue needed in the upcoming year to fund public services. Property affected by the mill levy includes real estate, land, buildings, and major personal property like cars and boats.

To reach the assessed value of your property, you should familiarize yourself with the "assessment ratio." The ratio is made of the appraised value of the home and its market value. For example, if the assessed value of a property is $500,000, and the market value is $600,000, then the assessment ratio is 83% ($500,000/$600,000). In some states, the assessed value is equal to the market value of the property. In others, the assessed value is far less than the market value. A county assessor appraises the value of your home based on comparing sales of homes like yours in the area. 

 If you have any exemptions, subtract these from your assessed value to arrive at the taxable value for your property. To estimate your real estate tax liability, multiply the taxable value of your property by the mill levy and divide that value by 1,000. For example, if your home was accessed at a $500,000 value and your millage rate is 25 (or 2.5%, your tax liability would be $12,500.

Tax Credits 

Tax credits on qualified expenditures can sometimes make the difference in deciding to renovate an investment property. A Tax Credit is a direct, dollar for dollar reduction in the amount of money a taxpayer must pay in taxes for a given year. The tax credit amount ultimately awarded is based on the qualified cost of renovating and restoring a historic property, which qualifying costs do not include acquisition, additions, or landscaping. Your applications must be filed with the state and or the U.S. Department of the Interior before completing the project and be approved to receive the credits.

You may reduce your tax liability with tax credits ranging from hundreds to thousands of dollars. For example, the Louisiana Division of Historic Preservation administers three historic rehabilitation tax credit programs: the Federal 20% Historic Rehabilitation Tax Credit Program and the 25% State Commercial Tax Credit Program, both for income-producing buildings; and the 18.5% State Residential Tax Credit Program, for owner-occupied historic structures.

Homestead Title is a full-service title and escrow company. Since 1934, we have provided our customers with competent, thorough, and professional service. Before each closing, we search public records to clarify legal and financial risks for lenders, realtors, and other stakeholders in the real estate transaction process. Our energetic and capable team of real estate title professionals provides accurate investigations, rapid turnaround time, streamlined paperless delivery, and exceptional customer service. For more information, call us at (504) 581-6427 and let us provide you with a smooth and efficient real estate closing.

Check Your Roof Before You Buy - Your Homeowners' Insurance Policy May Limit Coverage

Homeowners' insurance policies are becoming more restrictive with roof coverage to limit the number of claims. Several insurance carriers refuse to renew existing homeowner's insurance policies on a residence with a roof 20 years or older. The house did not pass the insurance company's inspection, and the carrier required replacing the roof before renewing the homeowner's insurance policy. As of 2020, most insurance companies require all shingle roof systems over seven years of age to be replaced with new ones. The reasoning behind this new scrutiny is that insurance companies believe there could be unseen roofing issues that could potentially deteriorate the deck, exposing them to higher risks for additional claims. 

If you have a roof that is 20 years or older, you may not be able to renew your homeowner's insurance, and if your older roof is damaged, you may only receive cash value for your roof replacement. 

Your roof is the critical shield for the rest of the structure of your house. It is the primary defense against damage from the elements. Because the average cost of a roof replacement can be $15,000 or more, it is one of the costliest parts of your home. 

To avoid potentially paying out a high claim, your home insurer may review any of your roof's features. These include what type of roofing materials were used, the age of your roof, and its current condition at the time you file an insurance claim.  

Your home insurance rate may depend on your roofing material's cost and durability. Your premium may be influenced by whether you have the proper type of roof to withstand weather events in your area and how much the materials cost to replace your damaged roof.  

TYPES OF ROOF DAMAGE CLAIMS 

Homeowner's insurance policies usually cover roof damage caused by fire, vandalism, falling objects (such as ice and tree branches).and "acts of God" (hailstorms, hurricanes, and tornadoes). Whether your insurance carrier pays for damage caused by wind, rain, or hail will be determined by your policy terms and the age of your roof.

A roof leak may be covered in your insurance policy. However, insurance companies put the responsibility on homeowners to prevent leaks and subsequent damage. They believe that it's up to the homeowner to take the necessary precautions to maintain the property. If your roof leaks and you didn't fix it properly, your insurance company might deny coverage.

These are general ideas, and your case may be different. It is good to check with your insurance company to understand what is covered and not covered before a claim is needed for specific details about your home's coverage.

The "sudden and accidental" factor is essential. If a leak in your roof is due to old age or poor maintenance, your claim will probably be denied. Insurance companies work on the belief that home maintenance is the responsibility of the homeowner. If a roof leak happened over time, it could have been avoided. Your home insurance provider will more than likely deny such a claim, and you could see a higher premium in the future as well due to the mark on your claim’s history as well as the condition of the roof.

You need to know what your homeowner's insurance covers on your roof before beginning the insurance claim process. The timeframe by which an insurance company allows you to file a claim can depend on the type of damage and the company's policy. It’s best to contact your insurance company immediately when you suspect damage.

The best way to keep your home insurance rates down is prevention. Reasonable steps towards taking care of your roof to keep your home insurance premium under control include:

·      Maintaining your roof (clean your gutters and keep off debris)

·      Choosing the proper roofing materials for your area (a licensed professional can advise you on the best material choices). 

·      Making sure your roof is installed correctly (choose only licensed contractors to work on your roof)

·      Keeping all documentation (photos, receipts, and other documentation)

·      Look for your best home insurance rates  

Homestead Title is a full-service title and escrow company. Since 1934, we have provided our customers with competent, thorough, and professional service. Before each closing, we search public records to clarify legal and financial risks for lenders, realtors, and other stakeholders in the real estate transaction process. Our energetic and capable team of real estate title professionals provide accurate investigations, rapid turnaround time, streamlined paperless delivery, and exceptional customer service. For more information, call us at (504) 581-6427 and let us provide you with a smooth and efficient real estate closing.

Buying a Condo? – A Few Things You Should Know About Title Insurance

Title errors can turn your condominium purchase dream into a nightmare. The average buyer sees Title Insurance as an add-on, but it's a crucial investment.

For the cost of title insurance, you can virtually eliminate any risk (and cost of that risk) of losing an investment due to a standard title error. 

 1. Title insurance guarantees the property is free of liens and clouds against the title. The previous owner may have had a lien or judgment filed against them for unpaid taxes, work done by a contractor, or condo fees. You might lose the condo and have to pay back the mortgage. Paying for title insurance helps protect against that.

 2. New construction? Title Insurance is still a wise choice.

 While you may be the first owners of the condo, you most likely weren't the land's previous owners. A title policy is the best way to protect against any liens that might exist against formerly unimproved land. An owner's title policy will safeguard against the most common title issues that an owner can face.

3. How much does title insurance cost?

 Title insurance policies will range in price, between $500 to $3,500, depending on the property's value, the provider, the location, and the coverage limits. You also have options in the type of coverage, including avoiding HOA violations. 

4. Only one title insurance policy is paid for at closing. If bought alongside a loan, two title policies(the owner's policy and a policy for the lender) are usually paid for at the closing.  

Homestead Title is a full-service title and escrow company. Since 1934, we have provided our customers with competent, thorough, and professional service. Before each closing, we search public records to clarify legal and financial risks for lenders, realtors, and other stakeholders in the real estate transaction process. Our energetic and capable team of real estate title professionals provide accurate investigations, rapid turnaround time, streamlined paperless delivery, and exceptional customer service. For more information, call us at (504) 581-6427 and let us provide you with a smooth and efficient real estate closing.

Tired of Renting? Here are Five Tips for Your Transition to Becoming A First-Time Homeowner

Before you move out of your apartment and purchase your first home, there are things you should know. As a renter, you have had the luxury of having a landlord to take care of everything. If you pay your rent on time and pay your utilities, everything else is usually taken care of by your landlord. However, as a homeowner, you will have additional responsibilities and costs. Here are some of the differences between being a tenant and a homeowner: 

Upfront Money: When you start a lease on an apartment, you are asked to pay the security deposit and the first month's rent. However, when buying a home, you will need to have enough funds or secured enough financing to cover the down payment, appraisal cost, earnest money, private mortgage insurance, title insurance, etc. 

Maintenance: As a homeowner, you will be responsible for maintaining your yard, contacting and scheduling repairs, and making sure you protect your property from everything from storm damage to termites.  

Long Term Commitment: Apartment leases typically are for one year with an option to renew. However, as a homeowner, you may have a 15 or 30-year mortgage.

Buying a home is a significant investment, and it does come with several benefits, such as more space, tax incentives, and the ability to build equity. 

Here are five tips to help you make the transition from renting to buying your first home: 

1. Research: Once you have narrowed down your choices of where you want to live, research how much homes in your area cost.

2. Work on Your Credit Score: Banks and Lending Institutions look for a good credit score and a low debt-to-income ratio.

3. Mortgage Pre-Approval: Getting pre-approved for a loan will let you know what you can realistically afford. This helps you save time by only looking at houses within your price range.

4. Budgeting: Buying a home requires a lot of planning and budgeting. To make a smooth transition, plan for the upfront expenses and costs (your mortgage payment, real estate taxes, association fees, homeowner's insurance, utilities, maintenance, and costs.

5. Find a Real Estate Agent: Before choosing a real estate agent, ask your friends and family for recommendations and then interview several to make sure you choose someone who is experienced, knowledgeable, and who will work with your best interest in mind.

Homestead Title is a full-service title and escrow company. Since 1934, we have provided our customers with competent, thorough, and professional service. Before each closing, we search public records to clarify legal and financial risks for lenders, realtors, and other stakeholders in the real estate transaction process. Our energetic and capable team of real estate title professionals provide accurate investigations, rapid turnaround time, streamlined paperless delivery, and exceptional customer service. For more information, call us at (504) 581-6427 and let us provide you with a smooth and efficient real estate closing.

Your Questions Answered About Refinancing

If you consider refinancing your home, you undoubtedly have some questions, such as How does refinancing work? What are the average costs to refinance? What are the title company's responsibilities?

The refinancing process may be a confusing experience if you've never been through it before. Here are answers to some of your questions:

HOW DOES REFINANCING WORK?

When you purchase a home, even though you have the full intention of making the mortgage payments, sometimes issues arise that keep you from making your financial obligations. Refinancing your home is a way to reduce your monthly mortgage payment. 

In the case of a divorce, you may need to refinance your home to remove your ex's name from the mortgage

Or on a positive note, you may choose to refinance because improvements in your credit score will now help you obtain a lower interest rate.

WHAT DOES "REFINANCING" MEAN?

A refinance loan is a second loan used to pay off the first one. When you refinance your home, it's typically necessary to pay off the original loan first. 

WHAT ARE THE AVERAGE CLOSING COSTS TO REFINANCE?

The closing costs of a refinance are between 2 and 5 percent of the loan. That means a 15-year-fixed mortgage at 2.35 percent will cost approximately $660 for each $100K borrowed. That said, many different factors can impact the price, from the type of loan you are seeking to your credit score. It's important to remember that each case is unique. 

DOES REFINANCING MEAN I GET A NEW TITLE? 

When you decide to refinance your home, the first thing your title company must do is search the public records to confirm ownership. In most cases, you will not be issued a new title at the end of the process. 

An owner's title policy is purchased at the original closing. For each separate loan transaction, you can purchase a loan policy. Once you are confirmed as the current property owner, you will be able to submit your owner's title policy to your title company to acquire a reissue credit.

A new title is only provided at closing if the "current vesting" (the property owners' name) changes. For example, if your new mortgage doesn't include your ex-spouse's name, you will need a new title.

WHY DO I NEED TITLE INSURANCE ON A REFINANCE?

First, it is essential to understand that title insurance is significantly less costly than many other types of insurance policies you might buy. That's because instead of paying a monthly premium, you pay a one-time fee at the time of the closing. In return, you get proof that you are the legal owner of your property. This ensures that past events (even ones you are unaware of) can not result in the loss of your ownership. Additionally, it is customary for both lenders and owners to purchase title insurance at the closing, so each party to the loan is protected. 

Mortgages are backed by securities. That's why investors must be confident that the title is "free and clear" of all encumbrances. Title insurance provides your lending institution with this confidence. Without title insurance, it would be too challenging to back mortgages with the necessary assets, and investors would be too wary of the risk. 

WHAT DOES THE TITLE COMPANY DO? 

The first responsibility of a title company is to conduct a title search to establish the legal property owner. This process may also reveal information that the lender might find relevant. For example, the title search may indicate that the property owner has had a judgment filed against them. If this is the case, the lender could require the owner to pay the judgment before starting the refinancing process.

Title companies are typically involved in the closing. When a lender has reached an agreement with a property owner and is ready to provide them with a loan, a title company will prepare a settlement statement. This document explains how the loan funds will be disbursed to the borrower. It also will show how the funds will be used. For instance, if a loan is being issued for the payment of several bills, the settlement statement will list them accordingly.

Sometimes the title company is involved in the disbursement of funds as well. There are instances when a lender will provide the agreed-upon loan to the title company instead of directly to the borrower, which often happens when the settlement statement includes other parties besides the borrower, who are also entitled to payment.

In general, the title company may also serve as a liaison between the various parties involved in refinancing. These can include not only borrowers and lenders but attorneys, surveyors, government employees, and more. Because refinancing can involve many steps, with many issues to resolve before closing can occur, it helps to have an intermediary who works with everyone to move the process along smoothly.

That's one of the primary reasons for working with a title company during refinancing is beneficial to all parties involved. By assisting in key steps and coordinating with various organizations and individuals, title companies ensure refinancing is more efficient.

At Homestead Title, we understand that refinancing a home can seem like a lengthy and overwhelming process. Every step of the way, we work with all relevant parties to help make it easier. To discover more about what we can do for you, contact us today.

Thinking of Downsizing - Here are Some Useful Tips!

Moving into a smaller home may be awkward at first, especially when you are used to having more room. If it seems like now is the right time to downsize, here are some helpful tips to help ensure it is a smooth transition. 

TRIM DOWN YOUR BELONGINGS.

One of the most complex parts of downsizing is paring down the amount of "stuff" you plan to bring to your new home. Decluttering is a great start to getting your move headed in the right direction. Sort the things you want to donate, keep, or sell first. Consider putting the items you are unsure about into self-storage rather than bring them into your new home. 

MAKE A PLAN TO UNPACK.

When you are ready to unpack and get organized, start unpacking with the closest areas first. By establishing an organized storage plan right from the start, you can begin life in your new home uncluttered. 

KEEP AN OPEN FLOORING PLAN.  

There are benefits to keeping your new home's floor space open. Since you will have a reduced amount of square footage, open floors offer more flexibility. For example, you can alter your rooms' layouts by moving furniture and accessories around as needed for activities. 

You Even if you are healthy and able-bodied right now, growing older often brings mobility concerns. By sticking with open traffic areas, you will also reduce slipping and tripping hazards. 

MIX THINGS UP.

When you're ready to decorate, try blending some of your new furnishings with old ones. You might have to part with the king-sized bed and the overstuffed sofa, but incorporating a few pieces from your old house will help you keep your space familiar. Try putting out some plants, hanging wall art, or adding new window treatments to help you get settled in. Opt for lightweight and light-colored window treatments to help your rooms feel sunny and airy. Try keeping your walls in light colors to make spaces feel bright and open as well.

Settling into a new, smaller home can be a challenging transition. However, if you cut down on clutter, opt for an open arrangement and keep innovative strategies in mind when organizing and decorating, your downsize will feel like the perfect fit!

Homestead Title is a full-service title and escrow company. Since 1934, we have provided our customers with competent, thorough, and professional service. Prior to each closing, we search public records to clarify legal and financial risks for lenders, realtors, and other stakeholders in the real estate transaction process. Our energetic and capable team of real estate title professionals provide accurate investigations, rapid turnaround time, streamlined paperless delivery, and exceptional customer service. For more information, call us at (504) 581-6427 and let us provide you with a smooth and efficient real estate closing.

Title Companies Are Great Communicators

At first glance, a real estate closing may appear to look simple, just a group of people sitting around a table signing a high stack of papers. However, real estate closings are a complicated process that requires several interactions with many different groups, from bankers to termite inspectors, abstractors in courthouses, to local real estate agents. Before the stack of papers is ready for signing, the title company must communicate with each group to ensure the process runs smoothly. This process can take one day to several weeks. It all depends on how many issues require resolution and how much time it takes to resolve any title problems.

Steps to a successful real estate closing:

1. Starting the process - An escrow or sales contract (agreement to close) will begin the process by opening a title order. The title company will then review tax information, loan payoffs, surveys, home inspections/reports, hazards, and other insurances, as well as legal papers to prepare a title commitment or preliminary report. All interested parties will have the opportunity to review this initial report.

2. Title search and examination - The title company will search public records, such as deeds, mortgages, liens, wills, divorce settlements, and other documents that may affect the title. We will review those documents to verify ownership and determine if any debts are owed against the property during this Title examination.

3. Document preparation and title request - At this step, the title company will review the lender instructions/requirements and the instructions from other parties before completing the transaction. The legal and loan documents must also be examined so that the title company can assemble the charges, prepare the closing statements and schedule the closing.

4. Settlement/closing the transaction - An Escrow/settlement officer will oversee the closing. The Seller will sign the deed first; then, the buyer will sign the new mortgage. Once the old loan is paid off and the new mortgage is signed, other parties to the transaction will be paid (including the Seller, real estate professionals, and attorneys).

5. Post-closing - After the signing is complete, the title agent will forward payment to the prior lender, pay all parties who performed services in connection with the closing, and disburse the net funds to the Seller before recording the documents with the mortgage and conveyance office.

At Homestead Title, we understand that a title transfer can be stressful. Paperwork and information requests may seem overwhelming at times. That’s why we take pride in offering you a timely, competent, and efficient experience. 

Homestead Title is a full-service title and escrow company. Since 1934, we have provided our customers with competent, thorough, and professional service. Prior to each closing, we search public records to clarify legal and financial risks for lenders, realtors, and other stakeholders in the real estate transaction process. Our energetic and capable team of real estate title professionals provide accurate investigations, rapid turnaround time, streamlined paperless delivery, and exceptional customer service. For more information, call us at (504) 581-6427 and let us provide you with a smooth and efficient real estate closing.

What are Mechanic Liens and How to Clear them from Your Title

A mechanic’s lien is a common but easily preventable occurrence for many Florida property owners. This type of lien is filed against a property when a contractor fails to pay one of their suppliers, subcontractors or laborers for property improvements.

The mechanics lien is a cloud on the property’s title and can prevent or delay the sale or refinancing of the property until the mechanic’s lien is paid. 

Often a mechanic’s lien is discovered long after it’s been filed in the public records, but by taking a few proactive measures in accordance with Florida’s Construction Lien Law, property owners can ensure their properties are protected from the burdens imposed by such mechanic’s liens.

Notice of commencement

File a Notice of Commencement before beginning any home construction or remodeling project. Record the form with the Clerk of the Circuit Court in the county where the property being improved is located. Post a certified copy at the job site, too.

The Notice notes the property owner’s intent to begin improvements, the location of the property, description of the work and the amount of bond (if any). It also identifies the property owner, contractor, surety, lender and other pertinent information. 

A property owner who fails to record a Notice of Commencement or incorrect information on the Notice could result in having to pay twice for the same work or materials.

Request a list of all subcontractors and suppliers who have a contract with the contractor to provide services or materials to the property.

Releases of lien

Prior to making any payment, the property owner should receive a Release of Lien from every supplier, contractor and subcontractor, which covers the materials used and the work performed on the project. The Release of Lien is a written statement that removes the property from the threat of lien.

If the contract requires partial payments be made before the work is completed in full, the get a Partial Release of Lien covering all workers and materials used up to that point in time.

Before final payment, obtain an affidavit from the contractor that specifies all unpaid parties who performed labor or services, or provided materials to the property. Make sure the contractor obtains releases from all of these parties before making final payment.

Notice of termination of notice of commencement

At the end of the project and after the contractor is paid in full and obtained all of the necessary Releases of Lien and affidavits as described above are obtained, file a Notice of Termination of Notice of Commencement with the Clerk of the Circuit Court in the county where the property being improved is located.

3 Reasons You Should Have an Attorney Present at Your Real Estate Closing

The decision to purchase residential or commercial property may be one of the biggest financial decisions you will ever make. Once you choose the right property, you want to make sure everything else runs smoothly throughout your real estate closing. Since there are so many laws and procedures involved, real estate closings can be confusing. Having an attorney present at your real estate closing, especially one with real estate experience, can be extremely beneficial.  

 Here are three reasons why having an attorney at your real estate closing is preferable to having a notary present: 

1.Different Laws for Different States

 Each state has different laws regarding real estate closings. In some states, a lawyer is required to handle some parts of the transaction; in others, it is not required. The following states require the physical presence of an attorney or other types of involvement at real estate closings: Alabama, Connecticut, Delaware, District of Columbia, Florida, Georgia, Kansas, Kentucky, Maine, Maryland, Massachusetts, Mississippi, New Hampshire, New Jersey, New York, North Dakota, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia and West Virginia.

 In Louisiana, having an attorney present at your closing is not required. However, it is in your best interest to hire someone familiar with the contracts and paperwork you will be required to sign. Whereas a closing attorney will review documents relating to the sale and answer questions you may have about the documents, a real estate attorney will be able to address any problems that arise during the closing process. 

2.Up to Date Documents

 Before you arrive at your real estate closing, your lender should have shown you and helped you understand the documents you are about to sign. You should already know who will be responsible for signing which documents in the closing packet. However, sometimes lenders make a change to the closing documents, and if this is the case, you will want your attorney to look over the amended documentation and make sure the conditions are reasonable.

Your attorney will also review the settlement statement and verify that all the math as well as any prorations of taxes or Home Owner Association dues are correct.

 3. Addressing Issues with Title

 Prior to the closing you may have had your attorney review the title search performed on your real estate and help you negotiate title insurance matters and/or issues with the title. However, many issues can arise during a real estate closing. More often than not, the standard realtor's form will be inadequate to address special circumstances.

 If an unresolved title issue is presented at the closing, it is best to resolve it immediately while everyone is present. Many title issues can be resolved by filing one of three common documents:

 • A quitclaim deed removes an heir and clears up title among co-owners or spouses; 

• A release of lien/judgment removes a paid mortgage or spousal or child support lien; 

• A deed of reconveyance records the payment of a mortgage under a deed of trust.

Homestead Title is a full-service title and escrow company. Since 1934, we have provided our customers with competent, thorough, and professional service. Prior to each closing, we search public records to clarify legal and financial risks for lenders, realtors, and other stakeholders in the real estate transaction process.  Our energetic and capable team of real estate title professionals provide accurate investigations, rapid turnaround time, streamlined paperless delivery, and exceptional customer service. For more information, call us at (504) 581-6427 and let us provide you with a smooth and efficient real estate closing. 

Understanding Title Escrow

Understanding Title Escrow

When it comes to large purchases, such as residential or commercial real estate, real estate, buyers, sellers, and lenders all want reassurance that security standards and privacy measures exist to protect the funds involved in the closing transaction. That is why the first step to any purchase is to open an escrow account. An escrow account is a temporary pass-through account held by the escrow holder whereby a neutral third party (such as a bank, title company, or escrow agent) will retain the money involved with the sale until the closing. Once all the procedural formalities are complete, the money and documents will be transferred from the escrow account to the seller and buyer, guaranteeing a secure transaction. 

How Does Escrow Work?

After a written sale agreement is reached, the escrow process starts. A party to the real estate transaction (seller, seller's agent, buyer, or buyer's agent) will open the escrow account and the escrow holder will provide all parties with the terms of the sale. Here are some of the tasks escrow holder may complete ensuring a smooth closing:  

• Communicating with all parties in the transaction

• Preparing written escrow instructions

• Asking for a preliminary report or commitment

• Requesting a statement of identity from the buyer or seller 

• Ordering demands or beneficiary statements

• Receiving and keeping track of invoices from home warranty companies, as well as pest, roof, home, and other inspection companies

• Preparing/securing the deed and any other recordable documentation

• Ensuring compliance with the lender's requirements

• Prorating all taxes, interest, insurance, and rents

• Making sure all purchase funds are received prior to closing

• Coordinating recording the deed to the property 

• Closing the escrow account when all parties are satisfied and the instructions of the lender, buyer and seller are met 

• Disbursing all authorized funds (charges for title insurance, recording fees, real estate commissions, and loan payoffs)

• Preparing a final statement for the parties, which reflect the disposition of all funds deposited in escrow

 When the escrow instructions have been carried out to each party's satisfaction, the transaction will proceed to close. At the closing, the property's title will be transferred to the buyer, the seller will be paid the sales proceeds, necessary documents will be recorded, and title insurance is issued. 

13 Steps to a Successful Real Estate Closing

The term “real estate closing” includes a process of specific steps in the home buying process. From the time that the buyer and seller reach a purchase agreement until the time of the closing,  there are several steps that should be followed to ensure that the property's ownership is transferred lawfully and smoothly. 

Here are thirteen steps to a successful real estate closing: 

1. Set up an escrow account: Escrow is when a neutral third party retains the funding and documents involved in the closing process to ensure everything is accurate in the transaction before it is complete. Escrow protects the buyer and seller during the home purchasing process.

2. Determine Property Ownership: In order to determine and confirm a property’s legal ownership, there must be an examination of public records to determine if there are any claims on the property. A title search entails a search for deeds, contracts, and other documents to make sure the title is "free and clear" of any defects.

3. Purchase Title Insurance: Title insurance protects the insured from financial loss related to the title of the property. There are two policies at a home loan closing: the lender’s policy, and an optional owner’s policy. Lenders require title insurance to protect their interest in the loan. Owners have the option to purchase title insurance to protect themselves from title defects that arise after the closing that could at the least incur legal fees and, in the worst-case scenario, may result in a loss of the property. Both are a one-time upfront fee.

4. Hire a closing attorney: There are numerous legal documents that must be signed during a real estate closing and some can be complicated. Buyers and Sellers often hire a real estate closing attorney to help protect their interests, to address any issues at the closing immediately, and to ensure all the appropriate closing documents are filed with the proper state and county authorities.

5. Get pre-approval for your mortgage: A mortgage pre-approval prior to your real estate closing shows the sellers that you have your finances in check and that you won't be denied a mortgage if they decide to sell you their home. Pre-approved loans help the closing process move faster, and often lenders will offer to lock in a lower rate to facilitate a smooth closing.

6. Determine closing costs: Closing costs may include fees related to the origination and underwriting of a mortgage loan, real estate commissions, taxes, insurance premiums, title, and record filing. Escrow companies will often charge a service fees for managing your closing process. Prior to your real estate closing, you should carefully review the itemized list of charges.

7. Schedule a home inspection: Many home buyers include a home inspection contingency in their purchase contract to ensure there are no surprises. Standard inspections include a review of the heating and cooling system, interior plumbing, electrical systems, roofing, doors, windows, walls, and foundation.

8. Renegotiate the offer: You can often renegotiate your purchase offer with the seller if the home inspections revealed any issues. If the seller does not agree to drop the purchase price or to pay for any necessary repairs, the buyers can choose to withdraw their offer and still be protected under the home inspection contingency.

9. Secure the mortgage interest rate: If the rate of mortgage interest was not locked in through the pre-approval process, the buyer should do so during the closing process. Interest rates fluctuate daily, so you should monitor rates to lock in the lowest rate possible.

10. Lift real estate contingencies: Any real estate contingencies that were put into place must be removed in writing before your scheduled closing.

11. Placing funds in escrow: To finalize your real estate purchase, you will need to deposit your down payment and pre-determined closing costs into an escrow account. Usually, a wire transfer of funds or a cashier check is required.

12. Do a final walkthrough: Before the date of closing and any final paperwork is signed, homebuyers should do one last walkthrough of the property.

13. Sign Closing Documents: On the date of closing, the buyer and seller's parties will meet in-person to make final payments, sign the legal documents, and officially transfer ownership of the property. 

Homestead Title is a full-service title and escrow company. Since 1934, we have provided our customers with competent, thorough, and professional service. Prior to each closing, we search public records to clarify legal and financial risks for lenders, realtors, and other stakeholders in the real estate transaction process.  Our energetic and capable team of real estate title professionals provide accurate investigations, rapid turnaround time, streamlined paperless delivery, and exceptional customer service. For more information, call us at (504) 581-6427 and let us provide you with a smooth and efficient real estate closing. 

What You Need to Know About Unrecorded Liens

When a property owner has a mortgage on their home, the mortgage company places a lien on the property. This type of recorded, voluntary lien will not affect any future sale of the property because the lien is be paid off during the closing process. Once the mortgage debt is paid, the clear title will transfer to the new owner.  

Unfortunately, unrecorded, involuntary liens may not show up during a normal title search. An unrecorded lien may end up costing the new owner hundreds or even thousands of dollars. If an unrecorded lien still exists on the property, the responsibility to pay the lien will transfer to the new owners. This can cause a significant and unwanted financial liability.  

The following are examples of unrecorded liens:

• Unpaid charges from municipalities for nuisance abatement services, such as grass/weed cutting, pest control, or the boarding up of abandoned property; 

• Code violations, such as structural issues. Some fees can accrue daily for undetected ordinance violations; 

• Outstanding utility bills. Many delinquent utilities go unnoticed until a new homeowner starts a new service;

• Unresolved fees for inspections, certificates, or building permits; and

• Special assessments for property features, such as sidewalks, sewer hookups, and road paving. 

Preventing the Complication of Unrecorded Liens

A recorded lien is any lien that is found in the public record. This includes mortgages, mechanic's liens, or tax liens. A title search performed by a title company or real estate law firm determines the vested owner, the liens, or other judgments on the property, the loans on the property, and the property taxes due.

An unrecorded lien is an involuntary debt placed against the property that will not be shown in the public record. Fines and fees can accrue daily, resulting in hundreds, if not thousands, attached to the property.

Unfortunately, there is no single place to search for all unrecorded liens. We advise that buyers do a title search that includes a municipal lien search to discover unrecorded liens or encumbrances on a property. 

If you are purchasing a home with a lender, the lender requires a title search. If you are purchasing a home without a lender, you must have a title search completed to obtain title insurance. Contact Homestead Title to handle your closing and we will take care of the title search as part of the closing process.

The title is then examined by one of our attorneys. During this process, this will confirm the title's chain and that the property is free from defects. Additionally, obtaining title insurance means that should any liens be missed, you'll be covered. Please note, if conduct your own title search you cannot obtain title insurance. You may end up losing your home, your down payment, and any other mortgage payments you've made without any legal recourse to get anything back.

Hiring a Professional Title Examiner 

We recommend hiring a title agent or real estate attorney to conduct a final property search to confirm the title's chain and that the property is free from defects. Additionally, obtaining title insurance means that should any liens be missed, you'll be covered. Please note, if conduct your own title search and miss an unrecorded lien, you may end up losing your house, your down payment, and any other mortgage payments you've made without any legal recourse to get anything back.

Homestead Title is a full-service title and escrow company. Since 1934, we have provided our customers with competent, thorough, and professional service. Prior to each closing, we search public records to clarify legal and financial risk for lenders, realtors, and other stakeholders in the real estate transaction process.  Our energetic and capable team of real estate title professionals provide accurate investigations, rapid turnaround time, streamlined paperless delivery, and exceptional customer service. For more information, call us at (504) 581-6427 and let us provide you with a smooth and efficient real estate closing. 

Correcting Misconceptions about Title Insurance

Before you started the process of purchasing your first home or commercial building, you probably had never heard of title insurance. As with the rest of what is involved in real estate transactions, title insurance can be challenging to comprehend. Title Insurance is often surrounded by misconceptions that keep most people from recognizing its importance.  To help you understand the importance of title insurance and how it relates to protecting your rights of ownership, here are a few misconceptions we would like to correct:  

Misconception # 1 Title insurance provides insurance coverage to protect you from financial loss related to a defect in the status of title to the property. 

If it is later discovered, that you do not own what you thought you purchased, or if someone else is claiming an interest in your property, title insurance may make you whole. Your title insurer may file a lawsuit on your behalf, take steps to remove the defect, or pay you money for your losses associated with the defect in title. 

Misconception # 2 The title search will protect me from title defects

Before signing the real estate transaction and early in the real estate purchasing process, a title search will reveal the property's history to uncover any issues that could limit your right to purchase. There may be hidden title defects, even after a detailed search of public records. Title defects include a disagreement in the record regarding the property's boundaries, easement/tax liens/easements on the land, forged signatures, claims by ex-spouses, and recording errors. These title defects may remain undiscovered for months or even years after you purchase the home. The title search reveals the problems. However, title insurance protects your rights of ownership against these defects.  If you think you don't need title insurance, think again. In 2018, title insurance policyholders filed over 730,600 claims with the American Land Title Association. The title industry spent over $615 million defending policyholders' rights and compensating their losses due to covered title defects. 

Misconception # 3 There is only one type of title insurance

 The two types of title insurance policies are the owner's policy and loan policy. An owner's policy protects you, the property owner, against loss or damage if there is a covered title defect in your right of ownership to the property. If you obtain a mortgage loan to purchase your home, your mortgage lender may require that you purchase a loan policy, also known as a lender's policy. This policy protects the lender's interest in the property until the mortgage loan is paid off in full. The loan policy provides no coverage to the property owner.  You can opt for more enhanced coverage within your owner's policy. Standard coverage protects you against financial loss and related legal expenses for common title defects that existed before you purchased a title insurance policy. Enhanced coverage includes the standard coverage and additional protection to cover matters that may transpire after the policy's date. 

Misconception # 4 Cash Sales Do Not Require Title Insurance  

 An all-cash purchase eliminates the requirement of a mortgage loan and reduces the need for lender's title insurance. However, an all-cash transaction does not eliminate the risk posed by unknown title defects. An owner's policy protects you against possible loss or damage from a covered title defect. 

Misconception # 5 Title insurance is too expensive

 The one-time premium for an owner's title policy is based on your home's purchase price and accounts for only a small percentage of your closing costs. Coverage will be in place for as long as you and your heirs own the property. When you add up the benefits compared to the costs, an owner's title insurance policy is quite reasonable. Unlike most insurance policies, there is no monthly or annual premium. Title insurance is a one-time cost you pay at closing when you purchase or refinance the real property. 

Misconception # 6 You get the same protection from homeowner's and title insurance  

 Title insurance protects a buyer's right to ownership and a lender's investment. On the other hand, homeowner's insurance is a policy that protects you against potential losses or damage you can experience to the structure of your home or its contents during an insurable incident. 

Misconception # 7 Homebuyers are not able to choose their title company

 Under the terms of the Real Estate Settlement Procedures Act (RESPA), the buyer has the right to choose the title company. Generally, the property seller will not require the buyer to purchase title insurance from any specific title company unless it has been instructed that the seller will pay for the owners' and lenders' policies associated with the real estate transaction. 

With so many misconceptions about title insurance, finding a team of professionals that you can trust is imperative. At Homestead Title, we are committed to providing quality service and being there for you if your property rights are threatened. To learn more about title insurance, contact us today.