Sep 12 | 2017

5 Terms Every Property Owner Should Know When Refinancing

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Whether 5 Terms Every Property Owner Should Know When Refinancingyou’re looking for more cash flow, want to lock in a good interest rate or just change the terms of your loan, you may be considering refinancing your home. One thing to keep in mind is that unless you’re already at the end of your loan term, there will likely be additional costs involved in the process. Before you move forward, make sure you’ve done all the calculations to check if the penalties and fees make the refinance worthwhile.

Once you’ve decided that refinancing is the best choice for you, it’s time to sit down with your mortgage broker or financial institution and go over your options. To prepare for your meeting, it’s important for you to understand the following terms and how they will affect you*:

1. Amortization period: This is the number of years it will take to pay off your new mortgage. While amortization periods can go up to 35 years, you should remember that even though your monthly payments are lower with a longer period, you’re paying more interest in the long run. It’s important to pay attention to this because if the Bank of Canada increases their rate, your lender may increase your amortization period in order to accommodate it.  Amortization period is often confused with the term of your loan, which is the period in which you commit to the interest rate and other conditions related to your mortgage with a specific lender – usually for about 5 years.

2. Debt-to-income ratio: To determine what products and services you may qualify for, a lender will check your debt-to-income ratio. This figure calculates your monthly expenses versus your monthly income and the resulting percentage is your ratio. It tells the lender how much more debt you can afford to take on. If you have a low debt-to-income ratio, you’re less of a risk to the lender.

3. Loan-to-value (LTV) ratio: This percentage refers to the amount of the mortgage divided by the value of the home. The maximum LTV ratio that lenders require to qualify for a mortgage/refinance is usually 80%. It determines whether you or your lender will need extra protection like mortgage insurance.

4. Portability: If you’re planning to move before your mortgage is fully paid off or you’re just not sure how much longer you’ll be staying, look out for the portability feature of your mortgage. It allows you to move your mortgage with the same interest rate and conditions to a new property with no penalty.

5. Prepayment penalties: With any mortgage, you will likely face a penalty if you pay it off before the term is up. It varies between lenders and depends on whether you have a fixed or variable rate. For instance, the penalty may be 3 months interest on a variable rate term but might be higher for a fixed term.  It’s important to find out the prepayment penalties before choosing a lender as some may have stricter rules and higher costs that make it harder to pay off.

Refinancing your home is not as simple as finding the best interest rate. The lowest rate doesn’t necessarily mean that you’re getting the best product. It’s important to evaluate all the other conditions that come with your new mortgage carefully before making a decision.

If you have questions about refinancing, you can always talk to your mortgage broker or lender.

*This is meant to provide a general overview only. Speak to your lending professional for more information.

 

Jun 16 | 2017

Title Insurance: What Every Homeowner Needs to Know

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Title Insurance: What every homeowner needs to knowYou combed through websites, apps, maybe even the papers and visited dozens of places until finally! You found the perfect house! Your biggest achievement, your biggest asset – how do you keep it safe? Or like in this case, how can you even make sure that it’s all yours?

Before you purchased your home, the property may have changed hands several times leaving room for mistakes like an incorrect survey, a non-existent permit or title-related issues. Even with a new build, somewhere along the way there may have been an error that could affect your ability to sell, mortgage, or lease your property in the future. These are the types of things that a title insurance policy can protect you against.

What exactly is title insurance?

Title insurance is a unique form of insurance. Unlike home insurance where you are insuring the structure and contents, title insurance protects you, the homeowner, against losses related to the title (ownership) and other defects relating to your property. Plus, it may cover fixing issues or legally defending your ownership, which can be very costly and stressful.

Do you automatically get a title insurance policy when you purchase property?

It’s a common misconception that homeowners automatically get a residential title insurance policy when buying property. While a lender policy is required on every purchase, a homeowner policy is not. It’s up to you to make sure that you have the protection available to you through title insurance.

Does the lender or loan policy cover you?

No, a lender aka loan policy covers lenders only  and protects their interests when it comes to priority and enforceability of your mortgage, title and survey defects, municipal issues and title fraud.

What does a homeowner title insurance policy cover?

A typical title insurance policy covers common issues that may have happened both before and after you’ve purchased your home. This is sometimes referred to as pre- and post-policy because the day you take ownership of your home is generally also the effective date of the policy.

The main areas of coverage in the Homeowner Policy are:

  • Fraud — a person fraudulently transfers your property without your knowledge or consent.
  • Forgery — someone forges your signature on a registered document, which allows them to sell or mortgage your property.
  • Encroachments — if a structure built by a previous owner sits outside the property’s boundaries or if a neighbour builds a structure that is partially on your property after you purchase your policy.
  • Lack of building permits — if a previous owner completed work to your property without the required building permits, you could be forced by your municipality to remove or fix the structure.
  • Duty to defend — if you have to protect and restore your title as a result of a covered title risk, FCT will pay for the legal fees and costs associated with it.

How much does a policy cost?

  • For a low one-time premium, you can ensure that you have the protection you need for as long as you own your home. Your lawyer can provide you with a quote within minutes.

Don’t put yourself at risk. For a free quote, visit fct.ca today!

This is provided as general information only. For further details regarding coverage, please review your policy.

 

May 24 | 2017

8 Tips for Selling your Home

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8 tips for selling your homeCompetition can be fierce in the real estate business, especially in these uncertain times. One day it’s a seller’s market and the next it’s not. So how do you make sure your home stands out in the marketplace?

While there are a lot of factors beyond a homeowner’s control—such as market conditions and regulatory environment— there are certain things a homeowner can do to maximize opportunity and profit.

Here is a quick list to help you make the most of your selling experience before you even put your home up for sale.

  1. Ask yourself the important questions – Is now the best time to sell from both a personal and a marketability perspective? How much do I want/need to get in terms of a selling price?
  2. Prepare yourself to have people in your home. Potential buyers will scrutinize your living space and you should be ready for the feedback.
  3. Put yourself in the buyer’s shoes and do a thorough walkthrough, critiquing your home from their perspective. Making a few small touch-ups and repairs can make a big impression.
  4. Clean, de-clutter and de-personalize your home so that prospective buyers can envision living in the space. For a complete listing of areas to consider when making your home look its best, click here.
  5. Gather paperwork such as utility and tax bills, warranties, property surveys and permits that will answer any questions for a prospective buyer.
  6. Maximize curb appeal to create a powerful first impression. Here are some good ideas to make your home more inviting, as suggested by MoneyTalksNews.com.
  7. Interview several realtors before selecting one to represent you. It is important to choose one that specializes in your area and type of home; one that has a solid reputation and valid credentials.
  8. Consider using the Certified Resale Home service – a pre-listing home inspection backed by an 18-month transferrable warranty to help your home stand out. By understanding what repairs your home needs, you can get in front of potential conditions that can delay or kill a deal. Visit thecertifiedresalehome.ca for more information on how to put FCT’s innovative service offering to work for you.

Do you have any other tips to share?  Please comment below!

 

Apr 9 | 2015

Service, service, service: the rise of the concierge realtors

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When iTunes disintermediated record stores, an entire industry reeled. The real estate industry faces a similar disruption, with the pragmatics of Craigslist and owner-sold homes beginning to win traction for some homebuyers and sellers.

And now, with online housing intelligence (like Zillow.com) breaking down the last vestiges of what was once a closed, opaque process into open, transparent, customer-centric relationship—and the rise of mobile banking means customer expectations for service and value are even higher—realtors are feeling the heat.

But there’s already a way out of the squeeze.Servicing the realtor

Time is more than money: it’s the stuff of life itself—and we’re all working harder, often with less free time than ever. Savvy realtors are taking a page from the hospitality industry’s concierge model—a one-stop resource person with an encyclopedic knowledge of his/her hotel’s amenities and smart choices downtown for the traveller in sore need of downtime.

For realtors, the concierge concept isn’t just a quick fix for one-time real-estate-related needs: it’s a terrific strategy to endear themselves to equally time-strapped clients…who talk up their end-to-end services to other prospects—it’s a brand-building strategy to boot. For realtors with well-heeled overseas clients, concierge thinking has been a way of life for years—it’s expected.

Closer to home, the whole idea is to connect clients with vetted service providers and vendors and to smooth the complex, stressful and detail-ridden journey of moving into or out of a house. From title insurance to post-close tasks like an expert painter, HVAC service, utility account setup and appliance installs, the hundreds of tasks required for a completed move aren’t just overwhelming: in the context of most working lives, they mean serious life stress.

In a phrase: service, service, service is rapidly becoming as key to realtor success as location, location, location. A positive move outcome means smoother transitions for kids in a new school and even doubling up on a deal, as one realtor did when helping an incoming homebuyer sever a property and spin off $150,000 in profit on a second lot—two sales on one deal and one very happy client. The boost in sales is one thing: the lift in sales word-of-mouth, seller to seller, is another. One US concierge-driven real estate firm in downstate New York sees the service offering driving over a quarter of incoming referrals. Yikes: that’s low-hanging fruit.

The service is driven by trust: the realtor presents a shortlist of strategies and service suppliers for a given neighbourhood, vetted, trusted, proven tradespeople and service providers and ‘marries’ them to the homebuyer. A vetted home inspection service—FCT’s Certified Resale Home program is one—takes a huge worry off a buyer’s sprawling to-do list. Landscaping and garden care is another high-impact, low-cost concierge touch which really adds to the “we’re here and we’re happy” sense of truly having moved in.

For folks relocating a family with a new job, it’s vital to have reliable tools to navigate school enrolments and car and appliance care—because something always goes wrong and at the worst possible time for time-crunched movers. Here’s a story detailing how realtors in the city of Boston, its tech hub growing like crazy, are expanding their services to help grow the city’s economy, one relocating new Bostonian at a time.

And there’s a compelling reason for realtors to adopt the practice as a differentiator and a word-of-mouth generator: online one-click real estate transaction services are gathering steam on the US West Coast, where half a dozen transaction services offer start-to-finish online sales transaction services for buyers—with and, perhaps worryingly, without real estate agents required. One such service, homesearch.com, focuses on the huge inventory of foreclosed homes in the US and works to provide realtors with tools to decrease *their* running-around time as much as possible—concierge services for realtors themselves? Now there’s a win.

Homesearch.com isn’t alone: mindful of the burgeoning sharing economy, Silicon Valley’s smartest minds are looking to disrupt the biggest purchase people make in their lives; venture capitalists have backed three successful online real estate pilot projects in the Bay Area alone in 2014, looking for the Über or Air B&B of real estate—what a transaction on a mobile smartphone app can never replace, however, is something else altogether.

The sale and purchase of a house is already complex and time consuming; a trusted navigator of those elements of the process long simply handed off to the fretful incoming buyer by default, are in fact a rich opportunity to demonstrate not just service, but that intangible which so inspires a relationship for the next purchase: thoughtfulness.

In a day and age where speed is perhaps overvalued against simple human interaction, thoughtfulness, the heart of the concierge experience for real estate clients, is the one service nothing can disrupt.

Feb 18 | 2015

Title insurance is protection you can build on

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In this age of competitive, seemingly non-stop, year-round construction projects, it is not uncommon for contractors and suppliers to go unpaid for their work. These individuals need a way to recoup their earnings and often turn to construction/mechanic liens for resolution. In Québec these liens are referred to as legal hypothec for construction.

Liens allow a contractor (or other professional) who has supplied labor or materials to a property they’ve worked on to make a claim against that property’s current owner(s) if not paid for their services, effectively forcing payment of the debt.

Unfortunately for unsuspecting homeowners, these claims can be crippling financially, not to mention the stress and hassle they cause.

“Lien” on title insurance

Most comprehensive title insurance policies can ensure homeowners are protected against construction/mechanics liens as well as many other serious issues. For a low, one-time fee that covers the insured(s) for as long as they own the home, homeowners can purchase a title insurance policy geared to their needs and based on their province of residence.

condo_smallOur coverage in the news

Consider the recent case of Mr. Perreault, a condo owner in Québec. Mr. Perreault describes the “hell” he experienced when he was affected by multiple legal hypothec claims from those those who built the walls, floors, and even did the digging for his new condo. He was at a complete loss as to what to do, overwhelmed by the scope of the problem and the looming financial impact. That is until FCT took over and laid the foundation for the support and resolution
he needed.

Nov 10 | 2014

How do I know if I have homeowner’s title insurance?

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title insuranceIt seems like an odd question- but the majority of people who have title insurance are likely not aware that they have a homeowner’s title insurance policy, while many who have a lender title insured mortgage transaction believe that they are an insured title insurance policyholder. What a conundrum!

Why is this the case, you may ask? Well in the first scenario, the unaware title insurance policyholder, got their title insurance policy at the same time that they bought their home and likely learned about it at closing – a very hectic time. Normally homeowners pay for their title insurance premium as one of the many fees on their lawyer’s bill when they purchase their home. So it is not normally a standalone item that you purchase by itself. The policy is often included in the lengthy package of legal documents that you initial at your lawyer’s office to close your real estate transaction.

Also title insurance has a one-time premium with no annual premiums and it stays in place for as long as you own your home. So you are not being asked to renew your insurance annually or have automated monthly premiums deducted from your bank account to remind you.

On the other side of the fence –the aware but not insured, they have likely chosen to use title insurance in their mortgage purchase or refinance and believe that they have a homeowner’s title insurance policy. In this case it is their lender who has the title insurance policy.
A lender’s title insurance policy protects the lender and the priority of their mortgage on your property. It does have some benefits to the homeowner, such as reduced transaction costs, smoother legal closing process and in the event of fraud, the lender has the title insurer to pay out their fraudulent mortgage – not the homeowner who was likely a victim in the process.

So how can you find out if you have homeowner’s title insurance?

Follow these steps:

1.    Check your real estate closing documents from your lawyer or notary.
2.    Ask your real estate lawyer or notary.
3.    Call us. If you are our insured we have your policy on file and will be able to send you a copy. Monday to Friday between the hours 8:00 am. to 8:00 pm. EST. Phone: 1.877.888.1153 .

If your closing documents are buried in your closet somewhere, then there is a rule of thumb that we suggest. Because title insurance is still a relatively new insurance product in Canada, if you purchased a home more than 10 years ago, then you likely don’t have a homeowner’s title insurance policy.

Still can’t find it – it’s time to call us and order one.

Jun 17 | 2014

“Title insurance. What’s that?”

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title insurance

My name is Sharon Milne and I have been interning at FCT for the last four weeks. I went back to school this year as a mature student to study Corporate Communications at Sheridan College.  At the end of the program each student must complete a five week internship.  Anne Cesak in Employee Experience at FCT generously took me on as an intern.  I consider myself fortunate to learn about FCT from a different perspective.  Several years ago, I was on the client side.

In 1994 I bought my first home.  I was young and single and “brand spanking new” was important to me.  I wasn’t the least bit bothered by the prospect of purchasing a new house.  You know … things like:

• Living in a fishbowl until I could afford window coverings
• Having absolutely no furniture other than my bed
• Being surrounded by mud for a year (or in my case clay – I lived in Oakville)
• Realizing my new neighbourhood had absolutely no trees … anywhere
• Not having a paved driveway for 18 months and,
• Having no fence in my backyard because my neighbours decided it could wait … for two years.

In 2000, my husband and I bought another new build and went through all the rigmarole again. None of this mattered as I revelled in the fact that everything was going to be shiny and new.  Ten years ago, we purchased our third home.  I marvelled at how much I had changed.  “Brand new” didn’t appeal to me as much as a larger property with beautiful mature trees. I spent two years searching for the perfect property, cognisant that it would have to be a “fixer upper” in order to fall within our budget.

One day, our real estate agent found a property that seemed to have everything on our wish list … except for one thing. It was far too expensive.  She was convinced there was a mistake on the price. Frankly, I was put out that she was showing us the property because it was $250,000 out of our price range. My husband James and I have always been on the same page when it came to finances. We were both savers and not huge risk takers, so I knew he wouldn’t go for it. He viewed the property first while I waited in the car with our three very young children. I was pregnant with our fourth and didn’t have the energy to view a property that was so ridiculously out of our price range.

James came out of the house with a boyish grin on his face and a skip in his step.  He quickly opened my car door and with a huge smile said, “Start writing the check, baby!”  WHAT!  I was stunned.  It was so out of character. He wasn’t even working at the time and didn’t seem fazed by my concern.  He simply stated, “It’s a risk we can’t afford not to take.” Although my gut wasn’t telling me to take the leap, I trusted his, albeit; somewhat reluctantly.

We ended up buying the house. When we met with our lawyer to sign the documents, there was something about the transaction that we had not encountered before.  Our lawyer strongly encouraged us to purchase title insurance. “Title insurance?  What’s that?”  He assured us that he did not get a cut of the fee, but felt it was important to protect ourselves.  He made a compelling case.  For a reasonable one-time fee and peace of mind, it only made sense to take our lawyer’s advice.

I have learned so much more about the importance of title insurance while interning at FCT.  There is no way I will ever purchase another home in the future without it.

Tell us about your first home buying experience!
Were you educated about title insurance when you purchased your first home?

Dec 17 | 2013

Building a Habitat Home in Nicaragua

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NicaraguaA blog post by Carolyn Morley, Business Development Manager, FCT.

For the past 10 years I have volunteered locally in the London, Ontario area with Habitat for Humanity Canada taking part in local builds for new homeowners. This past November I decided to take part in an international build. I joined 14 others from across Canada to help build a Habitat home for a family in Nicaragua. I did not know the family or any of the other Canadian participants before the trip, it was a life-changing event that will yield long lasting friendships and give me a new perspective on my own situation.

The family of four whose home we were building is headed by Estella whose photo appears with mine on this blog page. To support her family, she earns less than $100 a month by sewing, and selling bananas, passion fruit and squash grown on her lot. Her family currently lives in a two-room house made of wood and tin with no windows, bathroom, running water or electricity and dirt floors. The new home will be about 300 sq ft with brick walls, windows and cement.

Estella’s family members have to put in a number of work hours towards the build as Habitat for Humanity believes in a hand up, not a hand out. Estella’s extended family and entire neighborhood came together to help her contribute those hours. The build site was awash with volunteers, the family and neighbors chipping in to help Estella and her family realize their dream of home ownership.

One of the most amazing things to me was to see how simply things are still done there. There were no cement mixers, so everything had to be done manually. We had to drive to the local river and fill barrels with water by hand. Then we drove back to the build site to mix and pour the cement for the home.

Although they have little by our standards, Estella and her family and friends are the happiest, kindest, most giving people you could ever meet. Being immersed in their culture and working with them daily, you leave the build site knowing that you will not soon forget them or this experience. Although they didn’t speak English, gratitude is a universal language and it was clearly seen in everyone’s smiles, each day we were there.

To get involved locally or in one of the many countries Habitat requires volunteers for, you can find information at www.habitat.ca and their Global Village projects. Habitat is building 50 more homes in the tiny village outside Managua. You don’t need any construction or building experience, just a desire to help others.

Dec 10 | 2013

The huge benefits of home ownership for low-income families

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habitat for humanityA Guest Blog by Kevin Marshman, President & CEO Habitat for Humanity Canada

 

A home of your own is far more than a financial asset.

For low-income families, ownership of a safe and decent home can play a vital role in a family’s health and happiness, to the point where fewer sick days are taken and kids are getting better grades in school.

Those are just some of the insights from a new study led by Canada Mortgage and Housing Corporation (CMHC) that surveyed 326 families who have accessed affordable homeownership through Habitat for Humanity since 2000.

For many low-income Canadian families, especially those with children, once the bare essentials are paid — such as for substandard housing, and basic food and clothing — the pay cheque is gone. There is nothing left to go towards saving for better shelter or a better life.

Habitat for Humanity’s model offers a way out of this vicious cycle by providing a path to affordable home ownership. We sell houses to families at fair market value and gear mortgages to income – with zero interest and no down payment required. All we require upfront is hard work and sweat, and the desire to get ahead. Families contribute 500 hours towards the building of their own house, and volunteers help take care of the rest.

For the families that partner through Habitat, the difference shows in the quality their lives.

The results of the CMHC study are astonishing. Among the findings:

  • 89 per cent said their family lives have improved and 86 per cent say they are happier;
  • 78 per cent reported improved health of their families, with 31 per cent reported less frequent visits to the doctor and 25 per cent reported fewer sick days away from work;
  • An across-the-board improvement in children’s well-being and school performance;
  • More than half (58 per cent) reported that they were better-off financially.

Numbers don’t show everything.

Bradley and Charissa Shea have four children. When they first approached Habitat, they were living in a two-bedroom, mould-infested apartment. One of their kids, Caleb, is autistic, and Charissa must stay home to care for him. Habitat for Humanity helped them secure an affordable mortgage to buy their own home. This has taken a load off their minds — and allowed Bradley to upgrade his skills and better provide for his family.

April Smoke grew up on a First Nations reserve in Alderville, Ontario. Though she moved far from home to pursue post-secondary education, she and her son Josh could only afford crowded, unsafe, unhealthy housing in an unfamiliar place. Today, April is back among her community in Alderville, living in a Habitat home that was built there in partnership with the First Nations community. April now feels more at home and Josh is learning about his Ojibwe heritage.

These are only two stories. Over 2,200 families have received Habitat homes in Canada — and we’re working on building more. Whether you donate, volunteer on a build, or just let people know about our important work, we’d like you to be a part of it.

As this new study confirms, your contribution will make a real difference in the lives of families and their children. Learn more about Habitat for Humanity Canada and how you can get involved at www.habitat.ca.

Nov 14 | 2013

Will you face the risk of mortgage fraud without title insurance?

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mortgage fraudRecently I read an answer column in @TheProvince suggesting to a BC homeowner that they work with a bank and a lawyer to remove a fraudulent mortgage from their property. http://ow.ly/qorbe My heart sank when I noticed the absence of any information about title insurance by the homeowner or the columnist.
Hot housing markets with high home prices attract fraudsters. BC has some of the highest home prices in the country and counter-intuitively one of the lowest adoption rates of title insurance. I have created a chart below to demonstrate what happens if there is a mortgage fraud on your house with and without title insurance.  On one side of the table are the steps a homeowner with title insurance needs to do when he/she finds out that there is a fraudulent mortgage on title and on the other side are the steps for a homeowner without title insurance. The process from a title insurer’s perspective generally takes 3-8 months depending on the complexity of the claim.

Actions With Title Insurance Without Title Insurance
At time of home purchase Homeowner pays one-time premium for a homeowner title insurance policy. Premium is based on home purchase price. For properties valued between $200- $500,000, the premium averages $250-$350. Homeowner may also purchase Title Fraud protection policy after purchase (Cost is slightly higher than at time of purchase transaction) Homeowner declines or is not advised of homeowner’s title insurance at time of purchase.
Secure legal representation Contact title insurer and submit claim:- Provide documentation, statements etc to title insurer to establish coverage under claim. Title insurer secures representation on claim file with a knowledgeable legal advisor. Homeowner must locate a lawyer who practices in the area of title fraud.- Homeowner(s) must attend an initial meeting with & determine if they want to retain that lawyer to take on their case. May require more than 1 meeting
Cost for legal representation There is no deductible on a title insurance policy. Homeowner must discuss terms of payment with the retained lawyer and pay an upfront  retainer if requiredEstimated $3,000-5,000.
Hearing Process Once title insurer agrees to cover your claim, insurer completes the process of having the fraudulent mortgage deleted from title. Insured may be required to attend meetings or hearings to complete the process Homeowner must liaise and instruct the lawyer as the case continues.
If hearing is successful, fraudulent mortgage is removed from title<
May be able to recover some costs from a Provincial Land Title Assurance Fund
Total Cost to Restore Title Policy Premium amount averages: $250-$350.00 $10,000-15,000.00 estimated

The real benefits to the homeowner with title insurance are as follows:

  1. You have the peace of mind that you have insurance coverage for the issue;
  2. You do not have to worry about paying any of the out-of-pocket legal costs associated with having the mortgage deleted from your title;
  3. You have the peace of mind that you are dealing with a company that is very familiar with the    issue of title fraud and will choose knowledgeable professionals to deal with the matter; and
  4. The cost to you at the end of the day will be significantly less.

Again it should be your choice as a homeowner on how much risk you are willing to take on the issue. So be an informed consumer and, please ask us questions!