Is Minneapolis Title Insurance Necessary When Paying Cash?

If you’re here, chances are that you’re buying a home soon. Congratulations on your new investment and next step in living the dream! We know you’re excited to have a new place to call your own, but make sure to do all your research when buying a home. Some homeowners have outstanding liens that will go to the new homeowner, making them lose the money they invested putting into the home. We don’t want that to happen to you, which is why we have title insurance. Is title insurance needed for full cash payments, though?

Minneapolis-title-insurance-house-for-sale.jpg

How title insurance works

When buying a home, you’re buying the title of the land, not the land itself. A title is the right to own and use the designated property. Owner’s title insurance covers that title and the money spent to gain it. In turn, it pays for any claims or liens on the home from before you moved in. A lien is an unpaid credit claim on the title of your home, even if there has been a change in ownership. Even if you pay cash on the home, you will still have to cover the costs of those claims. Anything from unpaid work on the house to unpaid taxes can count as a lien on your home. When gaining the title of that property, you also gain any liens attached to that property, even if they were not accrued by you. Title insurance covers the liens left by the previous homeowners, so that you will not have to foreclose your new home to pay for those costs.

house-cash-payment-title-insurance-Minneapolis.jpg

Why title insurance is needed when paying cash

Paying cash on your home can be a great feeling. You’re free from mortgage payments and ready to start your life in your new home. However, your cash paid for the title of the property, not the outstanding liens from the previous homeowners. Chances are that after paying cash on your new home, you may not be able to afford to pay the property’s unpaid taxes or housework. The companies or governments that have a lien on your property own that portion that the property owners owe them. Now that you own the title, they have a stake in your property and need to be paid. Those costs still apply even if you pay cash on the home. This is where title insurance comes in. Owner’s title insurance helps pay those liens so that you don’t have to foreclose your home to pay them. 

If you’re buying a home, we can help cover you with title insurance. Call or come in today to find out more about title insurance and how you can get started. We at Twin City Title are always ready to help.

When is Minneapolis Title Insurance Required?

When buying a home in Minneapolis, there are many factors to consider. They can be how much you are willing to pay, what features you want, where you want the house to be, or what reality you want to get a realtor from. While these are all important, it is also important to ask what are the previous owners of the homes like. They could have unpaid taxes, a legal dispute that has yet to be settled, or undisclosed deeds that will fall on you once you purchase the house. Title insurance exists to protect you and your lender from these potential expenses, but is it required to have?

Minneapolis-title-insurance-owner's-lender's-house.jpg

Lender’s title insurance

When taking out a loan for the new home, the lender will most likely have a policy about insurance on the money that they lend to you, which is called lender’s title insurance. For the lender, it is an investment that they could lose without insurance if something were to happen. Each lender has their own way of finding insurance. That means different lenders will have different policies regarding their lender’s title insurance. 

Owner’s title insurance

Owner’s title insurance comes from a title company and is granted to you, the buyer, to protect the money that they have put into the home. While it is not required by law, it can be required by contract. A buyer should insist on an owner’s policy when buying a home to protect this big step. In Minnesota, owner’s title insurance lasts as long as you or your heirs own the property and can protect you from various claims depending on the policy you choose. 

house-sale-Minneapolis-title-insurance.jpg

Should I get owner’s title insurance

Even though it is not required, owner’s title insurance can protect you and your money if an undisclosed expense claim threatened your investment in your new home. These expenses include liens, building permit violations, property line errors, and encroachment. With owner’s title insurance, the costs for court or settlement is covered by your policy. 

If you are considering buying a new home, contact Twin City Title for any title insurance questions. We are happy to help you make your dream of a new home come true.

When is Minneapolis Title Insurance Paid?

The simple answer to this question is that in Minneapolis, title insurance is paid at closing. However, you may still have questions about title insurance, especially if you’re buying a new home for the first time. Here are some simple tips to note when paying for title insurance.

Minneapolis-owners-title-insurance-payment.jpg

Overview of title insurance

Owner’s title insurance protects the owner of the home from unknown documents or other calamities. Your policy can protect you and your family from any title claims in the future where you could potentially lose your home. The title insurance company will pay for the costs of court and get back the money spent to pay for the home.

How much title insurance costs

How much title insurance costs depends on the state and the home that was bought. Most states have a flat principal rate with the interest being determined by the title insurance company and the cost of the home. Check with our fee calculator to find out the price of title insurance for your home.

title-insurance-home-purchase-Minneapolis.jpg

Why title insurance is paid at closing

Title insurance is paid at closing because the costs have been finalized at that time. The cost of the home, the loan amount, and the type of transaction all factor into the cost of title insurance. For example, the amount will change if it is paid with cash instead of a loan. Your title company needs to account for all of the money that you have invested into the home.

Title insurance has to be requested before closing so that it can be a part of the deal with the previous homeowner in the sale. If you’re looking at buying a home, be sure to ask your real estate agent about owner’s title insurance, or contact us at Twin City Title to learn more or get an estimate.

What does my Minneapolis Owner’s Title Insurance Policy Cover?

Owner’s title insurance protects you while you’re buying a new home from any unforeseen circumstances that could lead to losing the home or paying for any previous debts. While there are many circumstances that could contribute to losing your new home, different types of Minneapolis owner’s title insurance can cover the costs to help you keep your home. The three most common ways are through unknown heirs, claims, and mistakes made by various parties in the building and payment of your new home.

Minneapolis-insurance-policy-homeowner.jpg

Heirs

If you purchase a home that was in the previous owner’s will, you could lose your home after they pass because it was granted to their kin. Unfortunately, it does happen. An owner’s title insurance would provide the money needed to buy the home or another home.

Claims

If someone else sues over a claim from before you owned the home, the owner's insurance will cover the costs and protect you from the claims. These claims can vary from failure to pay taxes or companies that were not paid after doing work on the house.

insurance-owners-title-house-Minneapolis.jpg

Mistakes

Mistakes in records or deeds can lead to losing your home. Any violations made by the previous owners, undisclosed prior mortgages or use restrictions, and errors in the authentication of legal authority can cause the money you paid for the house be compromised. However, an owner’s title insurance policy can help you keep your property and money from buying that property.

If you’re buying a new home or looking into getting an owner’s title insurance policy, Twin City Title is ready to help. Contact us for more information on title insurance, or check out our website for more information about owner’s title insurance.

Minneapolis title insurance vs. an abstract of title

Understanding the paperwork involved in purchasing your new home is essential before closing. If you are buying your next Minneapolis home, you may be familiar with the terms title insurance and abstract of title. However, you may be asking what these terms mean and when you really need them. This helpful blog post has you covered with all the details.

Minneapolis-title-insurance-abstract-of-title.jpg

Abstract of title

An abstract of title is a history of the title of the home you are considering for purchase. The abstract will chronologically trace all the public records of your property’s title starting from the original grant of title all the way to present day.

An abstract will include:

title-insurance-abstract-of-title-Minneapolis.jpg
  • A list of public records

  • Consecutive grants

  • Wills

  • Conveyances

  • Records and judicial proceedings affecting a title

In addition, your abstracter (the person who prepares your abstract) may also note:

title-insurance-abstract-of-title-Minneapolis.jpg
  • Date of the deed

  • Recording date

  • Names of grantor and grantee

  • Description of property

  • Type of deed

Why you should request an abstract of title

Before you sign on the dotted line and extend an offer for that new home, it is important for you to understand what you’re getting. Any discrepancy in the history of the title and deed could results in problems before closing. Your abstract will alert you to any potential problems. If an abstract has not already been provided, you can request an abstract from your title company or the county recorder with jurisdiction over the property.

Title Insurance

Title insurance, on the other hand, is an insurance policy that will protect you against any title defects. Your title insurance policy will protect you against any future loss when it comes to closing and beyond. Your policy can protect you from defects like:

  • Forged documents

  • Undisclosed heirs

  • Mistaken interpretation of wills

  • Misfiled documents

  • Prior liens on the property

  • Unpaid tax bills

  • Defense in court against any lawsuits for the above items

Types of Title Insurance

title-insurance-abstract-of-title-Minneapolis.jpg

As you head toward closing on your new home, you will need to secure two types of title insurance. An owner’s title insurance policy protects the owner or purchaser from any title defects. Once you had made an offer or closed on your home, a title defect brought to light could affect your ownership in the home or could cause a court battle to defend your ownership rights. An owner’s title insurance policy will protect your interests should a title defect be discovered.

In addition, you will also need to obtain a lender’s title insurance policy. The lender’s policy protects your mortgage lender’s investment should you be unable to pay off your debt. A lender’s policy will most likely be a condition of your mortgage approval.

For both owner’s and lender’s policies, your title insurance company will require both the abstract and a title search before they issue your title insurance policies. Here at Twin City Title, we’re here to provide peace of mind when it comes to buying your new home and protecting you from any title defects. If you’re ready to get started and learn more about title insurance, we’re ready to help.

Is Minneapolis title insurance negotiable?

Purchasing a new home in Minneapolis is a great investment for your family. However, many first-time home buyers are surprised by the costs of closing. Title insurance is usually purchased as part of your closing costs and a good question to ask “Is title insurance negotiable?”

title-insurance-negotiable-Minneapolis.jpg

Title insurance defends buyers from future property ownership claims, liens against the property you are purchasing, and other costly complications with your title. The best way to save money on your title insurance is to ask questions and know your numbers.

Shop Around

Title insurance includes a 2-step process. First, your title company will do a search of your property’s title history. They’ll look for errors or problems with the deed. Once the results of the search are documented, they will underwrite the policy protecting you against any future claims against the title.

Saving money on your closing costs starts with shopping around for title insurance (as long as your state allows title insurance companies to set their own prices). While your real estate professional may recommend a title insurance company they’ve worked with, consider getting a few quotes to find the best price. Here at Twin City Title, we have an online title insurance calculator to help you get started.

Check the additional fees

title-insurance-negotiable-Minneapolis.jpg

In addition to the title insurance itself, most title companies will also charge additional fees for things like mail and courier charges, copy fees, and costs for searches and certificates. As you shop around for the best rate, you’ll want to understand any other charges and which company is offering the best bottom line price.

Ask your seller to pay for your title insurance

While not always common depending on the market, you can ask your seller to pay for all or part of your title insurance fees. This typically works best when you are in a buyer’s market. You’ll want to negotiate this at the time of the purchase agreement and definitely before closing.

Understanding title insurance can be one of the challenging pieces to preparing for your home closing. And while title insurance is not necessarily negotiable, here at Twin City Title we’re here to help answer any questions and ensure your protection during the entire home buying process. If you have questions or concerns about title insurance, our experts can help you navigate your closing with confidence.

Can Minneapolis title insurance be purchased after closing?

Purchasing a new home and keeping all the details straight are part of the Minneapolis home buying process. There is a whole list of items on you to-do list when it comes to having your documents in order for closing. One of the important to-do’s on your list is purchasing title insurance. If you’re wondering if you can purchase title insurance after closing, read on for information you can use.

Can-title-insurance-be-purchased-after-closing-Minneapolis.jpg

What is the purpose of title insurance?

Title insurance was created as a result of a court case in 1868 more famously known as the Watson v. Muirhead case. Watson was the purchaser of the property and Muirhead was the seller. There had been a lien on the property but Muirhead did not disclose this fact to the buyer as his lawyer had informed him that the lien was invalid. The court decided that the purchaser should not suffer on account of professional mistakes and this gave birth to the concept of the first title insurance company in the world.

Lender vs. Owner Title Insurance

can-title-insurance-be-purchased-after-closing-Minneapolis.jpg

There are two types of title insurance. Lender title insurance ensures your lender has a valid, enforceable lien on the property and protects their investment of a mortgage. Your lender may require you to purchase lender’s title insurance for your mortgage. Owner’s title insurance, on the other hand, protect you as the new owner from any claims against the title once you’ve purchased your home.

What types of issues does title insurance protect you from?

Can-title-insurance-be-purchased-after-closing-Minneapolis.jpg

Your title insurance can protect you from any unexpected claims against the title of the home you are buying. These can include:

  • Previous or undisclosed heirs

  • Unpaid taxes

  • Property line disputes

  • Contract liens from previous work

Any of these could stall you closing and, if proven valid, could prevent you from keeping possession of your property. You title insurance will cover court costs and other expenses related to clearing your title.

Can you purchase title insurance after closing?

The short answer is no. Your title insurance must be purchased at closing to ensure your title and property is protected.

If you’re ready to sign on the dotted line when it comes to closing on your home, title insurance is a key ingredient and we’re ready to help. Twin City Title has been serving Twin City families since 1996 with their title insurance needs.

Is Minneapolis title insurance tax deductible?

If you’ve purchased a new Minneapolis home in the last year, you may be asking about your tax deductions in 2018. There’s no doubt about it - it’s beneficial to understand your tax benefits now that you’re a home owner. One of the frequent questions we get asked is…”Is our title insurance tax deductible?” If you’ve been asking the same question, we’ve got you covered with this short blog post.

title-insurance-tax-deductible-minneapolis.jpg

What is title insurance?

If you’re still in the process of buying your home, you may need to start with what title insurance covers. Title insurance is need for many real estate transactions and will protect you, as the buyer, from any undisclosed claims on the title of your new home. These can include:

  • Undisclosed previous heir to the property

  • Tax liens

  • Judgments against the title/property

  • Unsatisfied mortgage

Title companies will typically investigate your home’s title prior to issuing a title insurance policy to ensure there are no claims on your property and your closing goes smoothly.

How much does title insurance cost?

The cost of your title insurance policy will depend on the cost of the home you are purchasing and what state the home sits in. It’s best to contact your title insurance company for a specific quote. Try our fee calculator for an estimate on your costs.

title-insurance-tax-deductible-minneapolis.jpg

Is title insurance tax deductible?

The short answer is no. Your title insurance cost is not tax deductible. However, you can add the cost of title insurance to the cost basis of your home which can save you on taxes when you sell the home.

Capitalizing your title insurance cost

Capitalizing your title insurance cost is simply adding this amount to the cost basis of your home. This can help you save when you go to sell as it will reduce your capital gains.

Consult your tax professional

Don’t take our word for it - we’re the experts in title insurance. Consult your tax professional and research the latest tax regulations.

If you’re ready to purchase a new home and are looking to learn more about title insurance, we’re here to help. We work with individual buyers, real estate agents, and mortgage lenders to give you peace of mind throughout the closing process.