What is Title Insurance?

A title insurance policy protects property owners and lenders from losses that could result from disputes over ownership of a property's title. This could include fraud, liens against the property, or errors missed during a title search.

Title insurance is important because it protects you from title hazards that could threaten the financial investment you have made in your home or other property. It also protects the lender's investment.

There are two types of title insurance:

An owner's title insurance policy guarantees that the buyer has the right to the property. It usually covers the cost of any legal fees that arise if you have to defend your claim. The cost is based on the price of the property.

Title insurance is issued for a one-time fee usually due when you are closing or settling the real estate transaction. Insurance benefits are paid only to the name that is on the policy. Coverage lasts as long as you hold title to the property.

A lender's title insurance policy protects the bank or other lending institution that issues your mortgage from any losses resulting from disputes over who owns the property.

A policy covers the amount of the loan and the cost is based on the amount of that loan. Most lenders require this coverage, which ends when the mortgage is paid.

What's covered?

Owner's title insurance protects you from:

• Fraud associated with the title ownership
• Liens existing against the property at the time the policy was issued
• Mistakes in the public record that are not caught before the sale
• Inaccurate or conflicting wills and trusts related to the title
• Missing heirs who suddenly appear and claim to own the property
• Forged or misfiled deeds and other documents
• Errors or flaws in the title that are not discovered during the initial title examination

Lender's title insurance covers the amount of the mortgage loan and protects the lender's interest in the property if any of the above risks occur.

Sold your house? Deduct costs of sale including commission ...

When you're evaluating how much home you can afford, make sure you factor in the tax advantages of homeownership.

Owning your home not only allows you to build wealth through appreciation, but it can also reduce the amount of income tax you pay every year.

Here are seven tax benefits for homeowners:

1. Homebuyer tax credits

If you purchased your first home before April 30, 2010, you’re entitled to a tax credit of up to $8,000. If you currently own a home, but sold it to purchase another home before April 30, 2010, you’re eligible for a federal tax credit of up to $6,500.

2. Deductions for loan fees

Typically, you can deduct the “prepaid interest” you paid when you got your mortgage loan. That includes points, loan origination fees, and loan discount fees listed on your settlement statement, even if the seller paid those fees for you. Each time you refinance your home, you can deduct prepaid interest fees.
However, you must meet certain requirements to take the prepaid interest deductions when you purchase or refinance your home. Check with your accountant to be sure you’re following the rules.

3. Property tax deductions

In the year you purchase your home, you’re entitled to deduct the real estate taxes you paid at the closing table. You can continue to deduct the property taxes you pay each year.

4. The mortgage interest deduction

Every year, you can deduct the amount of interest and late charges you pay on your mortgage and home equity loans, though there are limitations. If you’re required to purchase private mortgage insurance (PMI) because you made a downpayment of less than 20% on your home, you can also deduct those premiums as mortgage interest expenses.

5. Home office expenses

If you have a home office you use only for business, you may be eligible to deduct the prorated costs of your mortgage, insurance, and other expenses related to that space. The government scrutinizes home-office deductions closely. Be sure you’re entitled to the deductions before claiming them.

6. The costs of selling your home

In the year you sell your home, you can deduct the costs of selling it, including real estate commissions, title insurance, legal fees, advertising, administrative costs, and inspection fees. You can also deduct decorating or repair costs you incur in the 90 days before you sell your home.

7. The gain on your home

If you lived in your home for at least two of the previous five years before you sell it, the government lets you to take up to $250,000 of profit on the sale of your home tax free. That amount is doubled for married couples. This deduction isn’t available on rental or second homes.

The government also allows you to subtract from your home sale profit any amounts you spend on improvements, such as window replacement, siding, or a kitchen remodel. Those deductions are in addition to the tax credits you can receive in 2010 for making energy-saving upgrades. Money invested for routine maintenance and repairs doesn’t count.

Are you ready to make a move? Visit me at www.BestOklahomaHomes.com and find your home's value or set up a search for a new one. Call me if you need to talk to 'live' person....Take care...

This article includes general information about tax laws and consequences, but is not intended to be relied upon as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice; tax laws vary by jurisdiction.

Image by Phillip

Source:

G.M. Filisko - 7 Homeowner Tax Advantages; buyandsell.houselogic.com

G.M. Filisko is an attorney and award-winning writer who's enjoyed the tax advantages of homeownership for more than 20 years. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

Understand which mortgage loan is best for you so your budget is not stretched too thin.

Mortgage rates can be fixed or adjustable. Do your homework to determine which is right for you. Image: Veer

Source: G. M. Filisko

$8000 TAX REFUND SLOW TO COME TO YOUR MAILBOX

First time home buyers are investing throughout the country in their new homes. What drives this rush is the US Government offer of a $8000 tax refund, of course. But if you count on getting it soon I think you should start exercising patience...and put your plans on hold.

Here is a link to the full article from Realtor - I thought you might be interested to read it yourself.

Where is the refund?

With smiles,

Bo in Yukon

  I was just waiting for a couple of days to make sure that this  announcement wouldn't be changed - as it was the last time.

FHA approved lenders are allowed now to issue so called 'bridge loans' that will allow the first time home buyers to use the funds to:

• cover their closing costs
• buy down their interest rate
• or put down more than the minimum 3.5 percent (the funds cannot be used to cover the minimum 3.5 percent). In short what it means is that the 8K cannot be used toward the downpayment of 3.5 percent.

Due Diligence
FHA expects that entities purchasing tax credit assets will employ appropriate due diligence
measures including, but not limited to:

• Require the homebuyer to draft and provide the IRS form 5405 “First-Time Homebuyer Credit.”
• Contact the borrower’s employer and review pay stubs to confirm there are no outstanding garnishments.
• Review the homebuyer’s credit report to ensure there are no unpaid student loans, or other obligations that could be offset against the credit.
• Validate that all of the eligibility requirements for the tax credit are fulfilled
• Review previous tax returns and IRS tax assessment letters, if any, to determine that the borrower does not have unsettled obligations to the IRS

If you need more information or if you want to receive the IRS form:

call me at 405.812.1572 or email me: Bo@Okla-OK.com

Well, we still don't know what is going on exactly...but from what I just recently read in the Inman New the $15K homebuyer credit cut is definitely in compromise.

The proposed Big 15K tax credit was stripped from 789 billion economic stimulus package and is headed for a vote this coming Friday, which is tomorrow.

Instead, the compromise bill is calling for $8,000 tax credit and it will eliminate the need for repayment requirement which is attached to the present bill of $7500.

In a proposed form the tax credit will pertain to first-time homebuyers - those who have not owned the principal residence in the last three years.

The credit will be available through the November 30th of 2009.

The compromised version of the bill will cost taxpayers closer to $6.6 billion over 10 years period which is a savings of nearly $30 billion.

The elimination of the repayment provision is good news...we will attract more interest even with this program and it is attractive to the consumer. Let us hope that after the bill passes the lending institutions will join the revitalizing effort and start lending the money.

Also, the bill will reinstate the $729,750 loan limit in high-cost areas for Fannie Mae, Freddie Mac and FHA Loan gurarantee programs.