Auto Insurance Quote for Your Consideration

As the auto insurance has been increased, banks have moved into it as well; nowadays the banks are also providing the insurance quote to benefit people. The records of the insured cars tell that the banks are providing less interest rate than the insurance companies.

It is also being seen that from the last year people are turning less to the insurance of vehicles. The change is the cause of the dramatically bad financial year and families are trying to lessen their expenditures. Due to this many families try not to spend more on these types of expenditures, although countries like Ireland and India where the road accident ratio is the highest, families do prefer insurance. In these countries families try to minimize other expenditures and try spending more on the insurance.

The insurance cost is a variable cost as only those owners would be incurred with it that insure their car, car petrol, car tax etc are the fixed cost as they have to be incurred in any case. The insurance quotes are provided online by banks and the insurance companies.

The online Insurance quote enables you to compare the premiums and allow you to select the best insurance policy as per your requirement. The online insurance quotes can be a better option as you can compare almost all of the quotes with each other.

Give a chance to compare the premiums
Enables to select the best one
Can compare other companies
Instant auto insurance quote
Less time consumed
Quick return
Simple forms
Less requirements
Reliable

The quotes that are provided by the insurance companies can be a bit hectic. This is because you will have to visit each of the company to get the quotes. This can be very time consuming. You will have to collect all of the quotes, come back home, sit and then compare those quotes. So if we give an eye on it we will come to know that a lot of time is wasted while collecting the information/ quotes and then to compare them but the good thing here is that the quotes would be reliable. Though you have wasted a lot of the time but in the end you will get the best quotes. After comparing all the valid quotes you will come across the best quotes.

Same is the case with the banks, the person will have to visit the bank time and again to collect the quotes but in the end after a bit struggle, he would get the best of it. The auto insurance quotes provided online are basically a link between banks, insurance companies and the customers who are willing to insure the vehicle through internet.

Auto Insurance: Accidents Happen

You need auto insurance. Most sates require insurance coverage just to register a motor vehicle. No proof of insurance, no registration. It’s the law. But the law or not, you need auto insurance to protect yourself, your loved ones and your assets. We live in a litigious society where lawsuits are common and facing a lawsuit is something you don’t want to face.

Having the right auto insurance protects you, your family and all that you’ve worked for. Choosing the right coverage in the right amounts is essential to protection of all the things important to you.

The Cost of Coverage

Auto insurance costs money. How much money depends on a number of factors including:

your driving history
your marital status
the kind of car you drive
your age
where your home is (and where you do most of your driving)
number of drivers
number of vehicles covered under the policy

If you have a few speeding tickets and you’ve had a few accidents (slow down) your monthly auto insurance premiums will be higher. If you drive an expensive sports car you pay more than if you drive a car built for safety.

Younger drivers have more accidents, therefore, their insurance premiums are higher. The factors that determine how much your automobile coverage costs are varied – some controllable, some not.

Automobile Policy Coverage

A quality auto insurance policy covers a variety of common contingencies encountered when driving down the highways and by-ways on the way to work.

Property damage coverage pays for damages done to the other vehicle and other property when you’re in an accident. Because property damage coverage protects the other driver it’s required in most states.

Bodily injury coverage protects you when the other party is injured or killed as the result of an automobile accident. The courts are clogged with cases involving bodily injury claims and you don’t want to add to the log jam.

Medical coverage pays for hospital stays, doctor’s visits and other medical expenses for you and all of those in the car at the time of the accident – again, essential to protecting your family assets – including your home. It doesn’t take much to roll up astronomical medical expenses even in a minor automobile accident.

Comprehensive coverage protects against things like theft, fire, a tree falling through the windshield and other non-accident related damages that can knock the family car out of service.

Uninsured motorist protection provides medical recovery expenses in cases of accidents with uninsured drivers or hit-and-run drivers who flee the scene of an accident and escape. You pay more for this protection but three out of 10 drivers are cruising the streets without insurance. Uninsured motorist protection covers you against these uninsured drivers who disregard the law and common sense.

Collision insurance pays to repair or replace a vehicle that’s been in an accident. Collision coverage comes with a deductible – an amount you pay out of pocket before the insurance company kicks in some cash to cover the crash. The smaller the deductible, the higher the monthly premium.

Collision coverage is one place you can save some money. Increase the deductible and lower your monthly payments. Or, if you drive an old clunker on its last legs, you can drop collision coverage altogether and simply get a new car in the event of an accident. That’s a decision only you can make.

Auto Insurance Coverage: How Much Is Enough?

Start by talking to an expert. Talk to an insurance broker. By bundling your home and auto insurance you often save money on both. And with insurance costs ever on the rise, saving on insurance coverage is always a good idea – as long as you’re protected by a reputable insurer who pays claims quickly and values the loyalty of its insured drivers and homeowners.

Another possibility? Your bank. Banks often sell automobile insurance as part of an auto loan agreement, something that can save you money and make it easier to get a car loan. If the bank knows its interests in your car are insured, that bank is more likely to help you get the car you need.

Using a bank to purchase car insurance can also simplify life by transferring monthly premiums directly from your checking account. No more writing checks, no more late fees, no more insurers threatening to drop your coverage.

How much coverage you need should be something you determine with the advice of an insurance expert. You need enough coverage to protect yourself, your family and your assets, including your home, but you also don’t want to pay for coverage you don’t need. Yes, it’s possible to pay for more coverage than you actually need and an insurance broker or your local bank’s insurance specialist will help you define your risk exposure to cover that risk with a solid auto insurance policy.

The Infinite Banking Concept Simplified

In a post from the popular blog The Simple Dollar, the following suggestion is made regarding the setup and operation of a bank on yourself or pay yourself first program:

“First of all, you have to establish a “master account” of some kind. This can be something as simple as a savings account at a bank or it can be an investment account where you introduce some risk to your “master account.” I’ll talk about the different options in a bit.

This “master account” is where you deposit all of your income. Every single dime you earn gets directly deposited into your “master account.”

Then, once a month (or once a week or however you choose to do it), an automatic transfer pulls a smaller amount of money out of that “master account” into your normal checking account. That is the money that you live on – you use it to pay all of your bills”.

While this is a nice post geared to help people, it did completely fail at explaining the Bank on Yourself concept at all. In fact, it suggests opening two standard bank accounts and earning interest on one (which would be taxed and earn a lot less than 3-5%). You see, the true Infinite Banking concept doesn’t work anything like this. So as the code breaker of how the rich invest their money, I will strive to clear up what the cited post should have said all along. Here goes…

As part of my ventures into learning how to make money outside of conventional means, I came across the Infinite Banking concept, which is also sometimes referred to as Bank on Yourself. I admit that I was taken aback by it because I had not heard of it… ever. After reading at least 3 books on it, I decided to contact a local life insurance agent who specialized in setting up these policies the proper way. I grilled him with lots of questions about it and how it worked. It seemed too good to be true but I decided to open an account and take the plunge. Three years into it, I wish I had opened one 10 years ago, even at birth if that was possible. By now most of you are probably wondering what the heck I’m talking about, so here’s some background on what it is and how it works.

The concept is simple. All you need to do is open up a specially structured whole life insurance policy. It needs to be with a mutually owned insurance company. You can’t just open it with any insurance company and only a handful exist that offer these kinds of policies: most of them you’ve never even heard of. You will also need to find a trained life insurance agent to set it up correctly. You’ll have to pay a fixed amount into the policy for 7 years. As an example, you might have to pay $2,000 per year for seven years. This is because of IRS tax laws. While your policy is active, it will gain in value every year by paying you dividends. The yields at the time of this writing can pay anywhere from 3-5%. Best of all, both the gains and distributions are tax free forever: that’s right, I said tax free. They are not tax deferred like with IRA’s or 401(k)’s. In addition, you can take a loan out on yourself at any time and the loan is never required to be paid back. If you do choose to pay yourself back, you can do so at a premium interest rate which goes right back into your account and then earns dividends on it. This allows your policy to act like a bank while compounding your money tax free.

Although the primary reason to open this policy is for investing reasons, you’ll also have the additional benefit of a whole life insurance policy covering you until about age 105. If at any time during that period you die, your beneficiary will get the insurance death benefit payout. What’s even better is that all the money you invested into your account comes back to your heirs or beneficiaries upon your death. Several financial gurus are pounding the table and talking about how whole life plans are a waste of money and carry high fees. They’re advising people to buy term life insurance and invest the difference. The problem is that most people pay a little bit per month for it (maybe $35 or so) but they don’t die within the 20 or 30 year policy term. The policy then expires worthless and their entire investment is lost. For this fictional policy, your loss would be $8,400 over 30 years. With a whole life policy, you (not you but your heirs or beneficiaries) would get all of the initial investment money back plus the dividends and other gains you received. In addition, your death benefit will still be intact so you will also get that money on top of your original investment. Did I mention that you can have more than one policy open on you and your spouse? Some people have 3 or 6 of these policies active!

After even more study, I found out that some of the richest families in the world use this exact concept to accumulate massive amounts of tax free wealth. My life insurance agent confirmed this by citing some local business owners who own several policies each. My hope is that many of you will read this post and do more research for yourself. I really do believe that everyday people can utilize this same concept to grow wealthy over time just like the wealthiest people in the world do.

Jamie has an MBA from Rutgers University and a Professional Certificate in Real Estate Finance, Investment and Development from NYU. He’s traded stocks since he was 13 and bought his first property within a year of graduating college. He also flipped properties and got out before the 2008 mortgage meltdown because he was able to see the market turning before it happened. He’s started two companies and also has experience in investing in antiques, collectibles, gold, silver and trading futures.

How Good a Deal Is Your Bank’s Mortgage Insurance Plan?

When you go to the bank to get a mortgage, you’ll inevitably be asked to take out mortgage insurance. The idea behind mortgage insurance is simply that if something happens to you or your spouse then your loan will be paid off which is good news for your family and the bank. Most financial institutions act like they are doing you a favor by offering you mortgage insurance through their own group plan, but are they?

The truth is that you could probably get a much better deal and at least an equal amount of protection by shopping around for your own insurance policy.

Essentially, mortgage insurance is no different than term-life insurance. With both, your policy only lasts for a specified period of time and pays its benefits if something happens to you or your spouse. The real difference comes down to how much control you’ll have over your policy and how much you’ll pay for it.

If you choose to use the mortgage insurance offered by the bank, you will not be able to customize a policy to fit your needs and you’ll be lumped together with other borrowers under a group plan. Because of this, you will only have limited control over your policy. For example, through a third party provider, you would be able to choose your own beneficiary, decide how to spend the proceeds if necessary, and cancel the policy at any time. You would not have these options with a lending institution.

Additionally, the bank maintains the right to not renew your policy and to cancel the policy when you sell the house. If you find your own insurance provider, you can make those decisions yourself.

The other big difference is cost. A third party insurance policy’s premiums will not go up, so you would pay the same premium today that you’d pay ten years from now. You won’t get that same guarantee from a bank which can and probably will increase your premiums during the life of the policy. In most cases, you’ll probably pay more through a bank anyway. In fact, you could pay as much as 40% more than you would if you shopped around and found your own insurance provider. Not to mention that the policy you take out through your bank will gradually decrease in value while a plan you select from an outside source will be worth the same amount during the entire policy period.

Of course, many people don’t mind paying more for their mortgage insurance because it’s more convenient than dealing with insurance agents. The truth is that you can easily find a policy that fits your needs and provides affordable premiums via the Internet. An organization, such as the Hughes Trustco Group, can even generate quotes for you from multiple insurance providers so you’ll know that you’re receiving the best deal possible on the policy you want.

The bottom line is that mortgage insurance is important and should be part of your home buying or refinancing preparations, but that does not mean you need to pay more or let the bank make important decisions for you. Instead, you should find your own personal plan from a third party provider which will let you stay in control of your policy and will save you money in the long run.

Everything You Need To Know About Banking

Most of us know what a bank is. We know that in order to better manage our financial life; we should have both a checking and savings account at a minimum. We also know their services are similar across the board for most banks. Some of these services include:

o Accepting deposits

o Making auto, home, and business loans

o Reporting what you paid and earned

o Issuing credit cards

o Online bill payment

o Providing investments

The list can go on and on, but those are basic things most banks will offer. However, what vary from bank to bank are the terms and conditions. That is why everyone should consider their unique needs and then select the bank that best meets those needs.

Comparing Your Choices

There are national, regional, and local community banks around the country. These banks are further categorized into the following segments:

o Commercial Banks

o Savings & Loans (S&C)

o Credit Unions

o Mutual Funds and Brokerage Firms

o Virtual (Online) Banks

Commercial Banks

Commercial Banks serve both individuals and businesses. They typically have multiple, well-located branches throughout a region, and offer broad range of services. Deposits are FDIC-insured up to $100,000 per type of depositor’s account. The only con is that fees at these banks can be the highest.

Savings and Loans Banks (S&L)

S&L banks tend to have lower fees than commercial banks. In some cases, service can be better due to the lower number of clients at the especially smaller banks. Most are FDIC-insured. The only con would be that they sometimes require you inform them of a withdrawal you intend to make. They often have fewer branches; therefore you can rack up lots of ATM fees for using non-partner banks.

Credit Unions

Credit Unions typically have the lowest fees and loan rates because they are non-profit. Earnings are paid out to members at the end of the year. The main con is that as few as 1 or 2 percent happen to be federally insured. Like S&L’s, they often have fewer branches; therefore you can rack up lots of ATM fees for using non-partner banks.

Mutual Fund and Brokerage Firms

Mutual Fund and Brokerage Firms often offer very limited banking services with low-cost or free checking linked to some interest-paying money market funds. The most notable con is that they often require larger minimum balances and they are not FDIC-insured, but have private insurance.

Virtual (Online) Banks
Virtual Banks are all online, thus there are no branches. In many cases, they don’t even send paper statements. Clients are emailed their monthly statements to view or print from online. They are FDIC-insured. They have started to lose some of their appeal as many commercial banks and even credit unions offer 100 percent online banking. The primary con here is that there are a limited number of ATM machines. Thus, if clients can’t find partner ATMs they can pay lots of money annually in ATM fees.

Checking Accounts

A checking account is a service provided by most banks which allows individuals and businesses to deposit money and withdraw funds from an FDIC-insured account. The terms and conditions of a checking account may vary from bank to bank, but, in general, a checking account holder can use personal or business checks in place of cash to pay debts. Most checking accounts allow customers to withdraw their money using an ATM machine.

Almost all banks offer some form of checking account service to their customers. Some may require a minimal initial deposit before establishing a new account, along with proof of identification, and a physical address. Students or other lower-income applicants may opt for a low-featured checking account, which does not charge fees for the use of personal checks and other limited services. Other applicants who open traditional checking accounts may benefit from interest payments by maintaining a high minimum balance each month.

Checking Basics

A typical checking account will handle deposits and withdrawals. The account holder has a supply of official checks which contain all of the essential routing and accounting information. When a check is written, the account holder’s account is debited for the amount of the check. The account holder is ultimately responsible for keeping track of their available funds, even though the bank will issue monthly statements.

When a Check Bounces

Checks must represent an actual amount of money in the checking account. If a check is written for an amount higher than the available balance and the bank pays that check, then the account holder that wrote that check will face an overdraft fee and potentially legal action. Further, the recipient of the bad check may also incur fees if the check bounces. Then the writer of the bad check may owe fees to both his bank and the recipient’s bank.

The recipient of the bad check can demand immediate cash payment for the original debt as well as a substantial fee for the returned check. Some banks will protect checking account holders by making the proper payments and notifying the check writer that an overdraft has taken place. Most often the bank will recoup their losses through substantial service charges, so it pays to avoid writing checks when the balance is unknown.

Savings Account

We have discussed the importance of saving back in the section on saving. In this section we will discuss some savings account vehicles.

In the world of Savings Accounts, there are three primary vehicles: Standard Savings Accounts, Certificates of Deposit, and Money Market Accounts.

Standard Savings Accounts

Standard Savings Accounts often allow you to withdraw your money whenever you want without penalties. Though the interest rate is low (rarely above 3%), it is less risky and steadily grows.

Certificates of deposit (CDs)

CDs typically pay a higher interest rate than regular savings accounts. However, you have less flexibility to withdraw whenever you want to. If you withdraw too soon, you could be penalized and lose some or all of the interest earned.

Money market accounts (MMAs)

MMAs also pay a higher interest rate than regular savings accounts. Unlike CDs, however, you are usually allowed to write a limited number of checks or even make a transfer during each month assuming you do not go below your required minimum balance. If you do go below your minimum, you could be assessed fees or lose any interest earned, or both.

Debit Cards

A debit card (often referred to as a check card) resembles a credit card and provides an alternative payment method to cash when making purchases. The card is an International Organization Standard (ISO) 7810 card which is similar to a credit card; however, its functionality is more similar to writing a check as the funds are withdrawn directly from either the cardholder’s bank account or from the remaining balance on a gift card.

Depending on the store or merchant, the customer may swipe or insert their card into a credit card terminal, or they may hand it to the merchant who will do so. The transaction is authorized and processed and the customer verifies the transaction either by entering a PIN or by signing a sales receipt.

The use of debit cards has become widespread in many countries and has overtaken the check and traditional cash transactions. It is very important to be mindful of what is spent by maintaining your check register.

Bank Fees

For both individual and business customers, the primary objective when selecting a bank is to save money. Therefore, knowing exactly what a bank is going to charge to up front can better help you select the account that works best for you. During this process, it is important to pay close attention to the fine print which often reveals hidden charges and fees. For example, if you opt for a free checking account at a smaller bank with limited ATMs, you may actually pay more in ATM fees throughout the month than you would have on monthly fees with a checking account at a larger bank with many local ATMs.

You should pay close attention to the fees that will affect you most. At most banks, the fees that will affect most customers include:

o ATM fees

o Debit card fees

o Stop payment fees

o Check printing feeds

o Overdraft fees

o Bounced Check Fees

o Monthly Checking Account Fees

o Check writing fees

o Balance inquiry fees

o Wire transfer fees

Choosing the right bank is an important financial decision. Be sure that you fully understand all of your banking options, products and services, and ultimately what your costs will be before you open an account.

Mortgage Insurance From a Bank, or an Insurance Company?

While mortgage insurance is offered to people who finance their home, in general it is really the same thing as life insurance. It is essentially just another form of it. The only difference is that a bank provides it, rather than an actual broker. People are usually offered this coverage when they obtain their mortgage. Is it the best choice though? If mortgage insurance is basically a form of life insurance, would you be better off acquiring the latter through an actual insurance company?

This article will break down a couple of the key differences between these types of coverage.

1. Ownership – When you go with a legitimate insurance company you have full ownership over the policy. When you use a bank, the lender owns the policy.

2. Amount of Coverage – With insurance companies you can purchase any amount of coverage. You can even add more coverage to your existing plan. With a bank your coverage is only for the outstanding amount of your debt. As the debt increases so does your coverage.

3. Beneficiary – With traditional insurance companies, you choose your own beneficiary. When dealing with a bank, the lender is your beneficiary. The death benefit automatically pays off the mortgage, no matter what the circumstance of your dependents is.

4. Knowledge – When dealing with an insurance company you are buying from a specifically trained broker or agent. They have been trained to understand the ins and outs of your policy, it is their business. When you get coverage from a bank, you deal with a bank employee who receives little training on an individuals insurance needs.

5. Terminally Ill Protection – If you become terminally sick or are laid off and can’t pay your mortgage BUT you can still pay your (much lower) insurance premium, you will be able to keep your insurance and the death claim will be paid when you die. If you only have coverage from a bank, become terminally ill and can’t make your mortgage payments, then you lose your coverage along with potentially losing your house.

The choice of insurance is completely up to you. When it comes down to it though, the above five points should be considered. Life insurance through a real insurance brokerage is the best protection you can have for both yourself and your mortgage. Next time you consider mortgage insurance, think about if those premiums could be better used on life insurance.

Canadian Travel Insurance: Where Can I Get Travel Insurance Deals?

When it comes to traveling, it is always best to be on the safe side, because you will never know what to expect. Whether you are traveling as a tourist, a backpacker, as part of business or school, it is important for you to have a safety net, which is a Canadian travel insurance plan.

Now, finding the money for travel insurance can be a challenge. Most of us work very hard for our money, and there is nothing wrong about trying to stretch every dollar you have. Travel insurance might seem expensive to you, especially if you have already spent a great deal on hotels and plane tickets. But what about safety and peace of mind? You really can’t put a price tag on that.

If you are about to travel on a limited budget, that does not mean you cannot get travel insurance. There are Canadian travel insurance deals which you can find, as long as you know where to look.

You can get travel coverage plans deals from many insurance companies and banks. But before you try to contact your insurance company, you must first determine what you want out of your travel insurance policy, so that you can get the best deals for your needs.

You need to settle on what you want the insurance to cover, particularly coverage for international travel, since most government health insurance plans do not cover out of local area expenses. If you are going to a place where they have below average medical facilities, you should make sure that your plan includes repatriation costs.

Check your personal health insurance if it is suitable enough, so that you won’t have to have it covered by travel insurance. You should also determine if you want your expensive personal items insured, such as jewelry, cameras, and so on.

After determining your needs, determine who will be covered by the insurance. Are you going to be traveling as a family, with a companion, or by yourself? There are deals available at insurance companies and banks depending on specific details, such as group deals or student discounts.

Review at least 5 Canadian companies and banks so that you can compare their deals which may possibly even include airline and hotel accommodations. Get started by looking at Canada’s largest banks such as Royal Bank of Canada, TD Bank, and the Bank of Montreal. Students should consult with travel agencies like Travel CUTS and student unions to see if they have specialized student discounts. You can also compare their fees to your local credit union as well. You can compare their offers and check their price listings and discount rates through their available websites.

To find out quotes on travel insurance deals, there are available sites on the internet with tools that can calculate how much they will cost. For example, World Nomads has a tool wherein you can specify your location, the policy start and end dates, and your particular type of policy (whether you will be traveling alone or with family) in order to get a quote price.

What Are Packaged Bank Accounts?

A packaged bank account is a current account that is accompanied by a range of insurance policies and other features in return for a monthly fee. The extras they offer range from travel insurance and preferential savings rates to will-writing and share-dealing services. Examples include

Lloyds TSB Premier Account
Halifax Ultimate Reward Current Account
Barclays Premier Current Account
HSBC Advance Bank Account
NatWest Advantage Gold Account

Around one in five adults in the UK has a packaged bank account. What do they include? Depending on the type of account and the provider, the extras they offered to a consumer can range from travel insurance and preferential savings rates to will-writing and share-dealing services. Some of the most commonly attached benefits include

Mobile Phone Insurance
ID theft packages
Commission-Free Foreign Currency
Travel Insurance
Breakdown Cover

Are they worth it?

Research has shown that annual worldwide travel insurance and breakdown cover are the two most useful and valuable benefits on offer to consumers when purchasing a packaged bank account. Subsequently, it has been noted that you can get a best buy travel insurance policy and best buy breakdown cover for less than the annual cost of some of these packaged current accounts.

In order to make these accounts worth the money spent on them, you need to know that you will use at least two of the benefits on offer. Before choosing to pay a fee for your bank account, ask yourself how many of the benefits you will use or need.

How have they been mis-sold?

The clearest reason for having been mis-sold a packaged bank account is where consumers did not even realise they had a packaged bank account, or an old current account was switched to a packaged account without them providing consent.

However, there are many other reasons as to why these could potentially have been mis-sold. Most packaged accounts include mobile phone insurance but it is definitely worth checking your home contents insurance as you may already be covered. You don’t need to pay for cover twice.

If your contents policy doesn’t already cover you, ask how much it would cost to add it to your policy and factor this in when deciding if it’s worth paying for a packaged account. It is also worth noting that mobile phone policies are notoriously full of exclusions, which can make it difficult to claim.

A small number of packaged accounts have identity theft insurance, which usually consists of a telephone helpline, or identity theft insurance, which can include access to your credit reports, emergency cash and cover for irrecoverable losses or the expense of sorting out the problem. However, if money is taken fraudulently from your account, your bank must refund you, as long as you have taken reasonable care. So why pay for a service that the bank must provide anyway?

Many premier current account providers also include annual travel insurance which often have numerous exclusions which detail when it is not possible for you claim. For example, maybe you thought it was a good idea to have Travel Insurance for your Ski Winter Getaway in the Alps? Perhaps not. Often, annual travel insurances that come attached to package bank accounts don’t covering skiing if it is deemed to be an extreme sport.

What Is Real Estate Title Insurance?

What is Title Insurance?

If you are refinancing your home or trying to purchase a new home, at some point the term Title Insurance will come up. An unbelievable number of people have no clue what title insurance is but they purchase it every day. In a nutshell, title insurance, is a policy that limits risk to the buyer, owner, and lender of a real estate transaction. The insurance may not protect all 3 financially on every deal but by eliminating risk for liability, title insurance has a positive effect for all parties involved.

At one time, if a person desired to buy a property, he would contact an attorney to research the property. The attorney would make a trip to the courthouse and pull all the necessary records to make sure that the property is clear of mortgages, tax liens, municipal liens and judgments. He would make sure that the person(s) selling the property is the actual owner(s) of record and he would also research the chain of title to make sure that the way in which the owner acquired the property doesn’t present any claims to other individuals or groups. If the person buying the property needed a loan, the attorney would assure the Bank that property was either clear or had encumbrances, meaning any liens or other property rights that may be infringed. As time went on and Banks became multi-national and it became more necessary for some type of insurance to indemnify the Banks in case there was a problem after the closing. Attorneys still comprised a good portion of title insurance in the United States. However, title companies popped up to specialize in these types of transactions. In many cases for simple residential transactions, title companies are faster and more efficient for getting through the lender’s process. Banks like Chase or Bank of America; have no idea who owns what or which attorney to use as far as ensuring them against risk in any given area. So, they let the borrower choose a title company or attorney to issue insurance to protect them.

Refinancing

In many ways, a lender’s policy and an owner’s policy are similar. If a person is refinancing, title insurance is purchased, at the borrower’s expense, in order to insure the new Bank that its mortgage will be in first lien position at the courthouse after the closing. At this point the Bank may request a title insurance commitment. This commitment is required for most loans as the Bank will request a Lenders’ Title Policy. A search of the courthouse records is performed by the title company and examined. In Pennsylvania, Deeds, Mortgages, liens, etc are recorded in the order they arrive at the courthouse. So, if you have an old mortgage and the bank records a new mortgage, the new mortgage will be in second lien position. In this case, the old mortgage would take precedence over the new mortgage as far as rights for foreclosing. The old Mortgage, once it is paid off, would have to be satisfied. And then, the new mortgage would move up into first position at the recorder’s office. This is the primary function of Lender’s Title Insurance on a refinance. The new Bank is making sure that if you were to ever default on your loan with them, they can foreclose on the property to get their money back. The house is collateral for the loan and they are just protecting themselves.

Purchases

When you are taking ownership of a piece of real property, you want to have assurances for many different risks that are involved in that type of transaction. The first of which, is identifying the proper owner. I am sure you have heard the old “Brooklyn Bridge” line regarding suckers and real estate. Title companies verify that for you. I have had people try to throw me off of property that they not only didn’t own, but had no clue who are the actual owners. As a proposed owner, you also really need to know if there are any kinds of liens that are attached to the property. There are many types of liens but the most common are; Mortgages, Judgments, Tax Liens and Municipal liens. These types of liens attach to the property not just the owner that accrued them. So, if that owner transfers the property to you and nothing is done about these liens, you are stuck with them. You may not be financial responsible for them, but these types of liens have no regard for who actually owns the property; they are just interested in getting paid. If you get stuck with someone else’s back taxes, the tax man does not care. The government wants its money and will sell your house to get it. So, I can’t stress enough the importance of having a qualified licensed title company, examine your potential investment.

I would just like to reiterate that the potential risks that are involved with real estate are so numerous and vast, it is easy to see why most Banks and Mortgage Brokers require it and most people that are in the real estate business, realize why it is so vital to the process. It is great to have some comfort in the fact that the land has been researched and is clear for transfer. Factor in the notion that it is a onetime fee for the assurance that you are taking ownership and only have to worry about the future, not the past. And, an Owner’s Policy last as long as you and your heirs own the property, where else can you get that kind of comfort for you and your family.

Mortgage Insurance: Getting the Facts

There are two types of mortgage insurance that you should know about. There is mortgage insurance that protects the lender (the bank), and there is mortgage insurance that protects the borrower (the homebuyer).

In Canada, mortgage insurance that protects the bank is offered by the CMHC, the Canada Mortgage and Housing Corporation. The CMHC allows buyers to purchase a home without having saved up a down-payment worth 25% of the cost of the house. If you are planning on purchasing a house, but do not have the 25% down payment, your lender will arrange everything with the CMHC. You won’t have to deal with the CMHC yourself. However, it is wise to check out their website because they have valuable information on many aspects of housing.

In America, the function of the CMHC is performed by various private mortgage insurance companies. They often belong to the Mortgage Insurance Companies of America, or MICA.

The second kind of mortgage insurance is insurance that you can buy at the time that you get your mortgage. It is a kind of life insurance that is worth the balance of your mortgage. If you buy this insurance, you are making sure that if you die before your mortgage gets paid off, your dependants will not have the burden of repaying your mortgage: they will simply inherit the property. If you have a joint mortgage, the other party will receive full ownership of the house and not longer have to make any payments if you die. This also works in reverse: if your partner dies, you will receive the house.

Mortgage insurance to protect your beneficiaries is often offered by the lending institution that provides your mortgage. You have the offer of taking their insurance and you have the offer of declining it. It is wise to insure your mortgage, though you might not want to insure with your lending institution.

Before you get your mortgage, check out other insurance agencies to see what kind of competitive mortgage insurance rates are available. You will need to know that you have insurance before you go in to meet with your bank or lending institution. Your bank will probably insist that if you want their insurance you have to sign on the same day you finish completing your mortgage. Doing a little research in advance will help you establish if your bank is offering competitive rates. If your bank is offering competitive rates, it might be easier to insure through the bank so that you only have one monthly payment to worry about. Your mortgage insurance payment, if taken through the lending institution, will be bundled in with your mortgage payment.

If you move, your mortgage insurance cannot be taken with you: it has no portability. You will have to renegotiate your mortgage insurance as you move.

Your mortgage insurance payments will remain the same for the duration of your mortgage, even as the balance of the mortgage decreases.

To sign on for mortgage insurance, there is no physical examination. There is simply a form to fill out detailing recent medical history. You can often be automatically approved right in the office. If you have a mild health condition, sometimes it will take a little more paperwork, but you will often be approved within the week.

Because there is no physical at the lending institution, this means that smokers can get better rates on their insurance. Your bank bundles the rates for non-tobacco users and tobacco users together, and averages them out. Smokers will probably not find a better rate than their lending institution offers. Non-smokers, however, might be able to find a better rate at an independent insurance agency.

If you are the sole person in a mortgage, ask the bank who the beneficiary of your mortgage insurance will be. Different insurance companies have different policies. Often, if you choose to be insured at the lending institution, the bank is the beneficiary. This means that the mortgage for the house will automatically be paid off, and the beneficiary of the house will simply receive the house. If you choose an independent insurance agency, the spouse or next-of-kin is often named beneficiary, which means that they will have the option of immediately paying off the house, or of taking the money and continuing to make the monthly payments of the mortgage.

Like all insurance, mortgage insurance is a gamble. It is something that you buy for peace of mind, and something that you pay money for that you hope you will never use.