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Title insurance can be one of those things that someone says you need when you buy a home, but you dont understand why.

Without it, you could be left with a nagging question in the back of your mind: “Does the seller really own the property?” If the answer is no, it could be bad if you dont have title insurance.

Some people or companies other than the title owner may have rights to the property. For example, the property owner may have sold mineral, air or utility rights to someone else. Or a bank with a mortgage on the property may own an interest in it. The government can also have a lien on the property for unpaid taxes.

What does title insurance do, exactly? Basically, it covers events related to the title that have already happened. It doesnt cover future things that happen to the title after it has been issued.

First, the title company or an attorney verifies that the seller owns the property and is free to sell it. The title search includes searching property records to make sure there havent been any clerical errors and that there arent any undisclosed heirs, spousal claims, omissions in deeds, unknown liens or fraud with the deed. If there are any errors, theyre fixed before the home purchase transaction is completed.

Second, the title company contracts an underwriting company to issue an insurance policy, called title insurance. This protects you in court if anyone challenges you to the title of your home. If you lose any equity, youll be compensated.

Two insurance policies will often have to be bought by the homeowner: one protecting them as the owner, and a lenders policy protecting the lender. The lender requires the insurance because it is providing a loan with the property as security. A problem with the title affects the value of the lenders security. Only the amount of the loan will be covered in the lenders policy, and it will decrease as the homeowner pays back the loan.

Published with permission from RISMedia.

Interest rates remain low, though thats no reason to stow your money under your mattress.

Hiding your money at home wont earn you any interest, and thats one of the benefits”no matter how small”that banks and credit unions can offer customers. But banks and credit unions have different benefits and drawbacks, and knowing how each works can make it easier to decide where to put your cash.

Here are some differences between credit unions and banks:

Profit vs. no profit: The first thing to note when comparing banks to credit unions is that banks are in business to make money and credit unions are not for profit. This can allow credit unions to offer better interest rates, which well get to shortly.

Credit unions are cooperatively owned and run by volunteer board members, who decide interest rates and other factors. To join a credit union, you may have to be a member of an employee group, association or some other specific affiliation, and may have to live in a specific geographic area.

Interest Rates: Credit unions have slightly better interest rates than banks on CDs, money market accounts, regular savings accounts and interest checking accounts, according to the National Credit Union Administration (NCUA).

Better Loans: Credit unions also have either the same or better rates on home loans, and their car loans can be half the rate of what a bank charges, according to the NCUA data.

Deposit Insurance: Both credit unions and banks have the same protection from the federal government through the Federal Deposit Insurance Corp., or FDIC. It insures up to $250,000 per account for checking, savings, money market and CD accounts.

Lower Fees: Credit unions generally charge less in fees than banks, according to the NCUA, though its website didnt offer specific examples. When looking into banking fees, ask about minimum balance requirements to avoid a monthly fee, whether youre limited to withdrawals from a savings account each month, what debit card fees it charges and if youre reimbursed for fees at an ATM not affiliated with your account.

More Options at Banks: From a retirement plan to business loans and investing services, and everything in between, most banks will often offer more services than credit unions do. Banks also have more brick-and-mortar locations and ATMs that are spread around the country and are free to customers, making them a more convenient option.

Wherever you decide to put your money, check online with the FDIC to ensure that the bank or credit union you want to do business with is insured by the FDIC and is a legitimate financial institution.

Published with permission from RISMedia.

When you were shopping for a house, you were probably so focused on the number of bedrooms, the size of the living room and the layout of the kitchen that you didnt give much thought to the basement. An unfinished basement can be a great place for storage, but finishing it can increase your living space significantly.

Benefits of Finishing Your Basement
If your house feels a little too small for your growing family, finishing the basement could be the solution. You can convert the basement into a bedroom, a family room or a game room where you can hang out and relax as a family. Finishing the basement may cost much less than you would need to spend to build an addition.

One of the biggest problems with unfinished basements is that they’re often damp, which leads to mold. Finishing the basement can eliminate that problem. The walls can be sealed and the temperature can be controlled to maintain a humidity level that won’t allow mold to grow.

If you plan to sell your house in the future, finishing the basement could increase its value. Families love the idea of having an extra bedroom or a place to relax together. That means you might be able to recoup a significant percentage of the money you invested in the upgrading of the basement.

Downsides of Finishing a Basement
Finishing a basement can have some drawbacks. The cost can be significant, depending on the size and current condition of the area. If moisture is a problem, that’ll need to be addressed before the basement can be finished. Remodeling a basement can be time-consuming and messy. If you currently use the area as a laundry room, you’ll have to deal with the inconvenience of construction.

A finished basement can lead to higher utility bills. This is because the area will need to be heated in the winter and air-conditioned in the summer, just like the rest of the house. If you have a large basement, your utility bills could rise significantly.

If you currently use your basement to store boxes, holiday decorations and things you dont use frequently, converting it into a living space means you would need to give up that storage area. If you have room in the attic, that might not be a problem. If that’s not the case, you might be forced to get rid of some things that you had been planning to keep or to put them in a storage unit.

Make the Right Choice for Your Family
Finishing your basement can give you more living space and add to your homes value. It’s a significant expense and will cause short-term inconvenience. You may have higher utility bills and will need to figure out how to deal with the loss of storage space. Having an extra room may outweigh the downsides. Consider the pros and cons to decide if finishing your basement is the right decision for your family.

Published with permission from RISMedia.

Even if you cant afford a home security system, you can protect your home and family with some quick, easy fixes that provide peace of mind without dipping deep into your pockets.

Try these tips from HGTV, the home and garden channel:

• Change the locks ” If you havent changed the locks since you moved in, someone out there has a key. Upgrade the locks, and while youre at it, check the security of your doors.
• Remove hidden keys ” If theres one under the mat or under a potted plant, you can bet a burglar will find it.
• Get a dog ” Dogs create a ruckus that can deter the average burglar. If you dont own a dog, put a sign on the gate warning that you do. For that matter, you can fake an alarm system by posting a security system decal.
• Use timers ” Digital timers enable you to randomly switch on interior lights and music to create the illusion that someone is at home.
• Add lighting ” Motion detector lights around the exterior of your home are an inexpensive way to deter a break-in. A light coming as someone approaches your doors is enough to send most intruders away.
• Install a camera “ Thanks to inexpensive DIY systems costing about $100, you can install a camera outside your home to let thieves know you have an eye on them.
• Install window stops “ They prevent windows from being opened more than six inches ” enough to allow for ventilation but not enough to let in a burglar. For slider windows, a broomstick cut to size will bar human access.
• Vacation smarter “ When you leave home for more than a day or two, stop mail and newspaper deliveries, as a pile-up advertises your absence. Let a neighbor know you will be away and ask him/her to put at least one of your trash cans on the street and take it in again. Last but not least, tell the local police when you will be away. Most departments will be happy to do an occasional observation drive-by.
• Dont advertise ” You never know who may be scanning your Facebook page or reading someone elses email. Dont announce your upcoming vacation except verbally to friends and family.

Hope this helps keep your home safe. Contact me for more tips and insights.

Published with permission from RISMedia.

If youre thinking about purchasing an expensive home, its important to understand how jumbo and conforming loans differ, and the pros and cons of each. Choosing carefully could help you save a lot of money over the term of your mortgage.

Key Differences
A conforming loan can only be used to borrow up to $453,100. For mortgages over that amount, there are jumbo loans. Since a homebuyer who chooses a jumbo loan is borrowing more money than the typical buyer, and since fewer people choose that option, a jumbo loan is much riskier for the lender. Therefore, jumbo loans require larger down payments and better credit scores than conforming loans, and often carry higher interest rates.

How to Get a Jumbo Loan
If you want to take out a jumbo loan, you’ll need to conduct research to find a lender. Since these mortgages are so risky, some banks and credit unions dont offer them at all. If you live in an area where real estate prices are generally well above the national average, it might be easier to find a local lender that offers jumbo loans.

Each lender sets its own guidelines that it uses to decide whether to approve or deny an application for a jumbo loan. If a lender denies your application because you dont have enough money for a down payment”or because your credit score is too low”dont despair. You might be able to find another lender with more flexible guidelines, although you could have to accept a higher interest rate.

What If You Dont Qualify for a Jumbo Loan?
If you have your heart set on a particular house, but its cost is above the amount you can borrow for a conforming loan and your application for a jumbo mortgage has been denied, you might still be able to own your dream home. You could take out two mortgages”one up to the conforming loan limit and a separate one for the remainder of the amount you need to borrow.

Depending on the lender(s) and your financial situation, you might need to make two down payments for very different amounts and have two different interest rates. That option could help you realize your goal of owning an expensive home, and you might wind up paying less per month with two separate mortgages than you would have with one jumbo mortgage since conforming loans tend to have lower interest rates.

Explore All Mortgage Options
Buying an expensive house is more challenging than purchasing a modest property, but that doesnt mean its impossible. A jumbo loan is one option, but if you cant qualify”or if the interest rate is too high”applying for two conforming loans could turn your dream into a reality”and could even save you money in the long run. Talk to several local lenders, get specific rates and estimated payments, and figure out which option would be best for you.

Published with permission from RISMedia.