Title insurance and mechanis lien

[mreynolds]

I was wondering if anyone knew anything about title insurance and new home construction. I filed my construction loan this week and most everything went well. We have about $40,000 in equity on our property because of improvements and the gargage I built and we can buy a 5.3 percent loan rate:D Our attouney is all hung up now on the Title insurance. Because I did the work before the bank came into play, that means that any liens would take persidence over the banks. However it has been over 6 months since I finished and all materials are paid for. Our loan officier seems pretty optomistic about the whole deal and the people she talked to said it shouldn't be a problem. Is there anyone that has experience with something like this pr has any advice? :roll:

[Rich]

This is the best explanation of title insurance I could find.
http://www.ctic.com/title.asp

[mreynolds]

Thanks for the site, we should find out next week what the final verdict is.

[grumpydasmurf]

Question about your equity, if I may ask. Of that 40k how much is profit? I mean did you sink in 60k to acheive 40k equity?

[mreynolds]

Within the bank loan the improvements we made were given a dollar for dollar value. We paid off the land, so that factored in. Then add the garage, driveway, electric installation. Each of these values were added along with cash we had in the end. It worked out really well for us because we did it over 2 1/2 several years. Now we don't have to worry about paying PMI which means we have more to spend or save (with building it seems like you never save, just upgrade!). The other nice feature is the loan to value ratio is much better which makes it easier for the bank to process.

[mreynolds]

oh, as far as that goes, when we get finished, we will be able to sell it for a profit(20 to 30 thousand). Basically my whole plan has been to build it for less than I could sell it (rocket science here). However, we really like the area and I have an excellent secure job here, so it would take something pretty drastic to leave.