Tips & Tools : Insurance

Top 10 Home Buying Mistakes

RE.com Tips & Tools — Wed, 11 Jul 2007 18:37:00 GMT

Use our list of common house-buying mistakes to avoid costly regrets.

1. Doing it alone. Buying a house is a complex transaction. Even if you don’t use an agent, you’ll need a complete, dependable team: lender, lawyer, inspector, insurer, as well as referrals and advice from friends and family. Enlist the help of these individuals early in the buying process.

2. Buying at first sight. You may be in love with the place, but does it fit your family’s needs and budget? Make a list of your needs and wants and make sure the house fits your requirements. Check out the neighborhood and the community before you buy by visiting at different times of the day and week to learn about noise and traffic patterns. Even if you don’t have kids, check out the local schools to make sure your resale value will be good.

3. Not getting pre-qualified and pre-approved. Being pre-qualified gives you a general idea of how much you can afford to borrow. Being pre-approved means a lender has verified your information and credit rating and agreed to provide you with a specific amount of money. You are in a better position to go house hunting knowing exactly how much you can afford and that you have financing.

4. Overbuying. You may qualify to borrow more, but can you afford to? Analyze your monthly costs: debt, food, transportation, entertainment, and savings. As a general rule, your total monthly debts, including your mortgage, should not exceed 36 percent of your income before taxes. Be sure to budget enough to cover closing costs (often two to five percent of the home’s purchase price), plus moving, redecorating and maintenance. Allow for increases in ongoing expenses such as utilities and taxes.

5. Misplacing your trust. No matter how much you like the agent, sellers, inspector, or the guy down the block who vouches for them, remember this is a business transaction. Your decision is binding. Do your own research and know your support team’s roles and responsibilities.

6. Relying on oral agreements. Get it right and get it in writing. Written agreements almost always trump oral ones when it comes to contracts. If the offer says the lawnmower is negotiable, but the agent says it’s included, get it in writing.

7. Skipping the fine print. You need to understand what you’re signing before you pick up a pen. Ask for documents in advance, make time to read them and ask questions. Get copies of your mortgage papers a few days ahead of closing.

8. Forgetting or betting on resale. Avoid buying a home that costs 50 percent more than neighboring homes and think before buying the most expensive home on the block. Your neighbors’ lower home values will weaken yours. Remember, markets change. If you buy intending to flip your investment and the market falls and you have to sell, your selling price may not be enough to even cover your mortgage.

9. Making an unconditional offer. Protect yourself with at least two of these contingencies in your offer:

Mortgage financing -- You’re pre-approved, but is the house? Before a bank will lend you money, it will want a formal appraisal of the property to confirm that there is sufficient equity in it to warrant the loan. If the house appraises lower than the sales price, the loan may be declined.
Inspection -- never buy an existing or new home without a thorough home inspection. Walk through the home with the inspector to learn more about the house and any concerns he or she may have.
Insurance -- confirm you can get adequate coverage. In some areas, it’s difficult to get hazard insurance.

10. Having buyer’s remorse. No place is perfect. There will always be surprises. Don’t let a few initial blips spoil the whole ride. And don’t miss a great house waiting for the perfect one!

Benefits of Homeowner's Insurance

RE.com Tips & Tools — Thu, 25 Jan 2007 19:54:00 GMT

To protect the investment you have made in your home, you need to find a competitively priced insurance policy that provides replacement cost coverage for your house and personal property.

The proper home insurance coverage involves:

Buying the right type of policy.
Having the proper levels of protection within that policy including special provisions for jewelry, your computer equipment, and other particularly valuable possessions.
Supplementing this coverage with special protection against natural disasters that are not covered in your basic policy.

TIP: Many homeowners think that the policy terms required by their lenders represent adequate levels of insurance, but this may not be true. It is important that you determine your needs and make sure they are reflected in your coverage.

What’s Protected?

Homeowners with mortgages are required by their lenders to have home insurance. Homeowner’s insurance can also protect your home from:

Fire or lightning.
Windstorms, hail or explosions.
Riot or civil commotion.
Damage from vehicles.
Sudden and accidental damage from smoke.
Vandalism or malicious mischief.
Theft and accidental breakage of windows.

Home insurance savings

RE.com Tips & Tools — Tue, 16 Jan 2007 20:12:00 GMT

Home insurance can be expensive but there are a variety of ways you can reduce the cost.

If you own a home, you want to protect your investment with home insurance. And it doesn’t have to cost a fortune. The following five tips can help you save.

1. Be selective when buying a home
Certain homes cost more to insure. To save on home insurance, research the potential cost involved before you make an offer on a home. For example, you may want to avoid buying a home that is situated in a floodplain if it means you’ll have to extra to buy flood insurance.

2. Shop around
You can often save on home insurance simply by taking the time to compare rates. Shop around to see which insurance company can offer you the best deal. Don’t choose a company just because you’ve always used them. Find out which one offers the best rates and has the best customer satisfaction.

3. Use the same company for auto and home
If you use the same company for both your auto and home insurance policies, you may be able to get a discount on your home insurance. Be sure to discuss this with your insurance company.

4. Improve your security and safety
Many insurance companies offer discounts for adding safety features to your home. For example, there’s a good chance you can obtain a better rate on your home insurance if you install a home security system. Ask your insurance company if this is the case.

5. Don’t over-insure
You can save on home insurance by not over-insuring your home. Remember, you don’t need to insure the value of the land, just the value of the home. Also, if any of your possessions are included in your policy, make sure they have maintained the value for which they are insured and that they are something you actually still own. Do a yearly check of your policy to make sure that it is accurate and still fits your insurance needs.

Be patient and do your homework. A little legwork can really pay off when trying to save on home insurance.

Homeowner's insurance: Protect your home and its contents

RE.com Tips & Tools — Tue, 16 Jan 2007 20:08:00 GMT

You can't afford not to.

You could look at homeowner’s insurance as one of the necessary evils of home ownership. But if your home is ever damaged by something like wind, hail, fire, or falling tree limbs, or if you’re ever burglarized, you’ll be glad you have homeowner’s insurance to cover the cost.

In fact, homeowners incurred $27.6 billion in losses in 2004, according to the Insurance Information Institute (www.iii.org). The vast majority -- 84 percent -- of those losses were for property damage and theft, the institute says. Homeowner’s insurance also includes liability coverage if someone hurts themselves on your property.

How it works

Homeowner’s insurance works like most other insurance plans: You pay monthly or annual premiums for protection against covered losses. Each homeowner’s insurance policy is different in terms of what kinds of losses are covered and the size of the deductible (the amount you have to pay yourself before insurance coverage kicks in).

The Property Casualty Insurers Association of America warns that homeowners need to understand the difference between the market value of a home, the assessed (tax) value, and the replacement cost. Not all homeowner’s insurance policies cover the cost of replacement versus the depreciated value of either the property or the contents of your home.

It’s important to review your homeowner’s insurance policy annually to make sure you have enough coverage. Your home may have appreciated in value, especially if you made home improvements. The cost of replacing the contents could have gone up since you purchased your homeowner’s insurance policy. And, the Property Casualty Insurers Association points out that it costs 10 percent to 20 percent more to rebuild a home than to build a comparable new home.

Some homeowner’s insurance policies will cover the cost of living in a hotel or other lodging while extensive repairs are being made to your home.

What type of damage will your policy cover?

Most homeowner’s insurance policies will cover damage from fire and so-called acts of God: wind, rain, hail, snow, ice and damage from falling trees or limbs, according to the National Association of Insurance Commissioners. One major exception is flood insurance, which must be purchased separately from your homeowner’s insurance. Depending on how close you are to a flood plain, your mortgage lender might even require you to purchase flood insurance.

Generally not covered by homeowner’s insurance policies are interior water damage from a storm -- unless caused by exterior damage -- sewer backups and removal of fallen trees that didn’t land on your house, according to the insurance commissioners group.

Some policies also won’t cover food spoilage from extended power outages, or damage in your home from mold. You may be able to purchase additional coverage, or endorsements, to protect yourself from these kinds of damages.

Most lenders require you to carry a certain level of homeowner’s insurance to protect their investment in the event of a catastrophe. Your insurance premiums can be included in your mortgage payments.

Make sure you ask your lender what their requirements are. Then, consider your particular needs and decide if you want coverage above and beyond what they require. No matter how much coverage you decide to have, one thing is for sure: Homeowner’s insurance is a must.

How to save money on homeowner's insurance

RE.com Tips & Tools — Tue, 16 Jan 2007 20:07:00 GMT

Insurance experts cite these 12 ways to cut your premiums.

All homeowner’s insurance policies are not created equal, nor do they all cost the same amount. Annual premiums for similar policies can vary by hundreds of dollars, according to the Federal Citizen Information Center.

Here are 12 ways to save on homeowner’s insurance compiled by the Insurance Information Institute and endorsed by consumer groups including the Consumer Federation of America and the National Consumers League:

1. Shop around. Ask your friends about their homeowner’s insurance carriers, check consumer guides and online insurance quote services. Another good resource is your state insurance department. States often disclose typical rates and the number of consumer complaints received about specific insurance companies. Ask plenty of questions of homeowner’s insurance carriers to get a feeling for the type of service they give and what they would do to lower your costs.

2. Raise your deductible. You could cut your homeowner’s insurance premiums by as much as 25 percent by raising your deductible from $500 to $1,000. Some policies have separate deductibles for different kinds of damages.

3. Don’t confuse what you paid for your house with rebuilding costs. That price includes the land your house sits on. If you include the land value in the amount you insure, your homeowner’s insurance premium will be higher.

4. Buy your home and auto policies from the same insurer. You may be able to save five to 15 percent on both policies. But compare with other insurers to be sure.

5. Make your home more disaster-resistant. Your homeowner’s insurance representative can tell you what steps you can take to make your home more resistant to windstorms and other natural disasters. For example, steps like adding storm shutters, reinforcing your roof or buying stronger roofing materials can save you money on your homeowner’s insurance premiums.

6. Improve your home security. You can usually get discounts of at least five percent for a smoke detector, burglar alarm or dead-bolt locks. Depending on the insurer, you could cut your homeowner’s insurance premiums by 15 to 20 percent by installing high-end sprinkler systems as well as fire and burglar alarms.

7. Ask about other discounts. Some companies discount homeowner’s insurance premiums for retired people because they tend to be home more often. Some employers and professional associations offer group homeowner’s insurance with lower rates, and some insurance companies offer discounts for members of certain professional groups.

8. Maintain a good credit record. Insurers often use credit information to price homeowner’s insurance policies.

9. Stay with the same insurer. Some insurers will reduce their homeowner’s insurance premiums by five percent if you stay with them three to five years, and by 10 percent if you keep the policy for six years or more.

10. Review the limits in your homeowner’s insurance policy and the value of your possessions at least once a year. You may be able to cancel extra insurance for items whose full value is not covered under your regular policy, such as expensive jewelry or valuable art work.

11. Look for private insurance if you are in a government plan. You may be able to buy homeowner’s insurance at a lower price in the private market.

12. When you’re buying a home, consider the cost of homeowner’s insurance. Your premiums may be lower if your house is close to a fire hydrant or if, for example, your neighborhood is served by a professional rather than a volunteer fire department. You may also qualify for lower premiums if your electrical, heating and plumbing systems are less than 10 years old. You can check the Comprehensive Loss Underwriting Exchange (CLUE) report of the home to see the homeowner’s insurance claim history of the property.

The full list of ways to save on homeowner’s insurance, and links to state insurance departments, is available at www.pueblo.gsa.gov/cic_text/housing/12ways/12ways.htm. For other tips on homeowner’s insurance, you also can visit the Insurance Information Institute’s Web site at www.insurance.info, or www.iii.org.

Insuring your home office

RE.com Tips & Tools — Tue, 16 Jan 2007 19:58:00 GMT

Determine what your coverage needs are, then pick the best option for your business.

There are approximately 11 million home-based businesses in America, and according to the Independent Insurance Agents and Brokers of America, almost 60 percent of them are not insured. This leaves them open to potentially crippling losses due to damage, theft, lawsuits or interrupted operations.

The first step toward protecting your business is to determine your needs:

Take stock of your tools and inventory. What would it cost to replace them? Even the basics of a computer and a printer can easily cost more than $2,500 to replace, and that’s usually the maximum your homeowner’s policy will recompense.
Consider how long your operations could be interrupted before your business would be adversely affected. If continuity is key to your business, you will need a more comprehensive insurance plan.
Think about liability coverage in case someone is hurt on your property. Do clients or delivery people come to your home regularly?
Find out whether you need to provide insurance for employees. Some states require that all employees have worker’s compensation coverage, and you may need to pay for health and auto insurance as well.

Depending on your business’ needs, you have four insurance options:

1. Homeowner’s insurance. This is the most basic coverage. Read the fine print on your policy. It may limit or exclude claims that are related to a home business. Typically, you can raise the coverage limit to $10,000 or add an endorsement or rider to the policy for greater protection. Also think about liability coverage. The typical homeowner’s policy covers social visitors but not business-related guests. If you often have clients, employees or delivery people on your premises, look into the costs of a liability endorsement (a rider that specifically protects you against lawsuits brought about by clients or business-related personnel).

2. Home office policy. This combines homeowner’s insurance with a business policy and can be less costly than adding endorsements or buying separate coverage. Policies vary, but they typically offer greater liability coverage plus coverage for equipment, loss of income and documents and expenses for a period of time while the business is non-operational or has to relocate. This type of insurance is generally suited to small businesses without a lot of inventory, employees or visiting clients.

3. Business owner’s policy (BOP). The most comprehensive coverage, a BOP will compensate you to an even greater degree for liability and property loss or damage. BOPs also insure the structure that houses your business, so it may overlap with your homeowner’s policy. A BOP may also include coverage of multiple locations or property stored outside your home.

4. Self-insurance. Here your business isn’t covered by a company but assumes its own risk. You take the money you would pay into an insurance policy and put it into a bank account to be used if you need it. This option is best used when you have a limited amount of property and little risk of liability.

The cost to insure your home business can be as low as $250 a year. But the more comprehensive your plan, the higher your bill. While you may not be able to reduce your insurance needs, there are ways to reduce your bill.
As with any type of insurance, one way to lower the cost of your policy is to increase your deductible. The more risk you take upon yourself, the lower your rate will be from the insurer.

Another effective strategy is to shop around to make sure you get the lowest rate. The cheapest insurance may not provide the most effective coverage, so make sure that coverage, terms and conditions meet your minimum requirements before signing a contract.

Take steps to avoid claims, which drive up your premiums. Install smoke detectors and other security features, maintain your grounds and equipment well and make backups of all files. Sometimes your insurer will lower your premium if you provide proof you’ve taken measures to reduce your risk.

You should review your policy about once a year or whenever there is a major change in your business.

Should you increase your insurance deductible?

RE.com Tips & Tools — Tue, 16 Jan 2007 19:57:00 GMT

You can save money on your homeowner's insurance by taking on more risk yourself. Here's how it works.

Most financial experts agree that increasing the deductible on your homeowner’s insurance policy is a good strategy. The higher the deductible on your policy, the lower the premium for your homeowner’s insurance. Another way of looking at it is that the more risk you take on, the less your home insurance will cost.

The deductible is the dollar amount of losses or damages that you, the policyholder, pay before the insurance company starts paying – the amount that is your responsibility to pay on any claim. For example, if you make a claim that your insurer accepts for $5,000, and your deductible is $250, the insurance company will pay $4,750.

The deductible should not be confused with the premium. An insurance policy’s premium is the amount you pay to keep the policy in force.

Many policies have deductibles of $250. Experts say that by increasing this deductible to $500, you can usually save 10 percent on your premiums. By increasing the deductible to $1,000, you may be able to double your savings.

Deductibles and potential savings:

Increase your deductible from $250 to:

$500 and you could save 10 to 12 percent
$1,000 and you could save 20 to 25 percent
$2,500 and you could save as much as 30 percent
$5,000 and you could save as much as 37 percent

Of course, if you are considering increasing your deductible, you must be able to afford to pay the higher deductible should you make a claim. The purpose of homeowner’s insurance is to safeguard you in case of an unforeseen event that damages your home or its contents. If your deductible is too high, it could negate the benefits of having insurance in the first place because the risk you are assuming is too great.

For most people, though, insurance is for serious losses and it’s worth it to have a higher deductible and pay relatively small claims. Why? Whenever you make a claim, it affects your risk profile and your premium will increase. Avoiding asking your insurer to pay small claims – maintaining a perfect no-claim record – keeps your premiums low and makes renewing your policy easier. The idea is you only use your insurance for a major claim that you couldn’t possibly cope with.

If you opt to increase your deductible, consider using some of your premium savings to safeguard your home and possessions. Invest in improving the security of your home by adding such things as a smoke detector. Often, this kind of improvement makes you eligible for a discount on the cost of your policy.

You should also check to see if your insurance company is giving you a competitive reduction on your premium for a higher deductible. It’s an important question to ask. You can use the bullet points above as a rough guide to the premium reduction you should get, assuming nothing else in your policy changes. But you should do the math or have an insurance company’s sales rep do it for you.

The flip side of your deductible is the coverage limit of your policy. It is the maximum the insurer will pay for what is insured. Like increasing the deductible, lowering the coverage limit will reduce premiums. But you should make sure that a lower coverage limit adequately protects your home and contents.

Sometimes a deductible is built into your policy that you are unable to change. For example, hurricane deductibles on homeowner’s insurance have become more common and have increased in size during the last few years. Usually they are not dollar amounts but percentages of a home’s insured value.

Why do I need homeowner's insurance?

RE.com Tips & Tools — Tue, 16 Jan 2007 19:56:00 GMT

Could you afford to rebuild your home without it?

Homeowner’s insurance provides a safety net to protect what is likely to be your biggest investment – your home – in the event of property damage, theft and even liability. Without homeowner’s insurance, many people would be unable to afford expensive repairs and could even lose their homes.

Just think about what kind of position you would be in if these scenarios occurred, and you did not have homeowner’s insurance to protect you:

Lightning hit your house and sparked a fire that destroyed half the structure and most of your belongings.
A hurricane or severe thunderstorm tore through your neighborhood and ripped your roof off, destroyed your outbuildings and brought a tree down on your house.
Someone broke into your house and stole or damaged thousands of dollars worth of electronic equipment and other valuables.
Someone sued you for hundreds of thousands of dollars after injuring themselves on your property.

About 95 percent of homes are protected by homeowner’s insurance, according to a 2003 study by the Insurance Research Council. The Insurance Information Institute (www.iii.org) suggests that you need enough insurance to cover the cost of rebuilding your home at today’s prices, and to meet today’s building codes.

Most homeowner’s insurance policies also cover damage or loss of the contents of your home. But, as with the structure, you need to consider whether you want your coverage to cover the cost of replacing the items, or to reimburse you for their actual value. Replacement-cost homeowner’s insurance costs more, but provides better protection.

Finally, most lenders require you to carry homeowner’s insurance to cover the cost of the mortgage. You can cancel your policy once your mortgage is paid off, but think twice before you do so: homeowner’s insurance really does protect your investment.

Closing Costs Checklist

RE.com Tips & Tools — Thu, 11 Jan 2007 20:15:00 GMT

It is important to carefully compare closing costs between lenders before selecting a loan.

Closing Cost Descriptions

We recommend that you carefully compare closing costs between lenders before selecting a loan. This task is complicated by the fact that different lenders and brokers use different names for the same item. All lenders and brokers are required to provide you with a Good Faith Estimate detailing the services you may be required to get and pay for in connection with your loan.

This Good Faith Estimate will give you a way to compare loans and see what your closing costs would be. Below you will find a list of coded names that describe the different fees, which may be associated with the services previously mentioned. These codes and names correspond to those found on the HUD-1 Settlement Statement.

Broker Fees

700 - Sales/Broker’s Commission: If you use a real estate agent or broker to buy a house, the seller (not you) of the house will usually pay a fee to the real estate agent/broker. This commission is usually a percentage of the sales price.

Lender Fees

801 - Loan Origination Fee: A fee to cover the lender’s costs for obtaining financing and administrative costs, most often expressed as a percentage of the loan amount (1% = 1 point). Can be a flat fee and/or paid by sellers and third parties.
802 - Loan Discount Fee Discount Points: Often called "points", is a one-time charge to you from lender to lower the interest rate on your loan. Generally, the more points you pay, the lower your rate. Each point is 1% of the loan amount. For example, if you have a loan amount of $100,000, one point would cost you $1000. Sometimes you will see offers with negative points. Negative points refer to money paid to you that can be used to offset your other closing costs. You will usually see a higher interest rate with negative points.
803 - Appraisal Fee: The appraisal fee covers the cost of evaluating your home to estimate the fair market value. The appraised value of your home is used to calculate LTV. See LTV for more information.
804 - Credit Report Fee: This fee covers the cost of obtaining a credit report, which shows how you have handled other credit transactions. The lender uses this report in conjunction with information you submitted with your Q-form regarding your income, outstanding bills, and income to determine whether you are an acceptable credit risk, how much the lender can loan you and at what interest rate.
805 - Lender Inspection Fee: This covers inspections by the lender or outside inspector of your house/property. Most often associated with new construction.
806 - Mortgage Insurance Application Fee: You may be charged this fee to process an application for Mortgage Insurance (MI) if needed.
807 - Assumption Fee: The assumption fee is a charge to you, if you take over the existing mortgage on the house you are purchasing. For example, if you are buying an existing house from someone you may have the option to take over the mortgage that the seller is paying.
808 - Mortgage Broker Fee: If you use a broker to get a loan, any fees charged by the broker are listed here.
809 - Underwriting Fee: A cost to cover the final analysis and approval of the mortgage; often the lender’s cost to the investor who will subsequently purchase the loan.
810 - Tax Service Fee: A fee paid to set up a service which identifies the payment due date of local taxes for the servicer of the loan.
813 - Processing Fee: A fee charged by the lender to cover costs associated with the processing and closing of a mortgage loan.
814 - Application Fee: A fee to reimburse the lender for internal costs associated with initiating the application process.
822 - Flood Certification Fee: Since your house is collateral for your loan, the lender wants to be sure the property is not in a flood zone. This fee covers obtaining a report from the Federal Emergency Management Agency (FEMA) that indicates whether or not your property is in a flood zone. If your home is located in a flood zone, you will need to get flood insurance. Most homeowner insurance policies do not cover flood damage. This only covers the report and not the insurance if needed.

Lender Pre-paid Items

901 - Interest: Lenders require you to pay the interest due on your mortgage from the close date to the first day of the following month. The interest due is calculated using the loan’s interest rate, the loan amount and the number of days until your first payment. For example, if you close on the 11th of March, you will pay 21 days interest (3/11-3/31) assuming your first payment is May 1st. Mortgage interest is always collected in arrears therefore you will pay the April interest in the May payment using the example above.
902 - Mortgage Insurance: Premium Lenders usually require Private mortgage insurance (PMI) when your LTV (loan amount divided by property value) is greater than 80%. The insurance protects the lender in case of loan default.
903 - Hazard Insurance: Premium Since the property is collateral for the loan, you will be required to insure your house. At closing, you must pay the first year’s premium or prove that you already have coverage (if refinancing). If you are purchasing a condominium, your association policy will already cover your unit and you will not need to make this payment. Homeowner’s insurance covers you against damage from fire, wind, and other natural hazards. Flood damage is usually not covered by a Homeowner’s Insurance Policy.

Escrow Account Deposits

An escrow account is an account used when the lender will be paying your homeowner’s insurance and property taxes on your behalf. You prepay the amounts and the lender pays the costs as they come due. You will probably have to pay an initial amount to start the reserve account.

1001 - Hazard Insurance: This fee represents the amount the lender withholds to ensure you pay your homeowner’s insurance on time. Typically, the lender will require you to pay two months of premiums at closing, and then the remaining payments are included in your monthly payments.
1002 - Mortgage Insurance: If you need private mortgage insurance (PMI), you may be required to prepay those premiums. Remember to reference canceling mortgage insurance to see when you can stop paying it.
1003 - City Property Tax: If your property is in a jurisdiction where city taxes apply, you will be required to pay a portion of the taxes at closing.
1004 - County Property Tax: The amount of property tax you owe can vary dramatically by county and the date you purchase your home.

Title Charges

1101 - Settlement or Closing Fee: This fee pays for the services of the escrow holder or settlement service that handles all the financial transfers and payments associated with the closing process. The title company sets these fees.
1102-1104 - Title Fee: Title fees may include title search, title examination and title insurance.
1105 - Document Abstract Preparation Fee: Lenders or title companies may charge a fee to cover the costs of preparing the final legal documents required for closing.
1106 - Notary Fee: This fee covers the cost of a person licensed as a notary public to swear to the fact that the individuals named in the documents are the actual persons that signed them.
1107 - Attorney Fee: You may be charged a fee to pay for legal services of a settlement service provider at closing. The lawyer will usually oversee the signing of the documents.
1108 - Title Insurance: The total cost of your and lender’s title insurance.
1109 - Title Insurance Lender’s Coverage: Protects the lender against loss due to problems or defects in connection with the title. The face amount of coverage is usually written for the amount of the mortgage loan and covers losses due to defects for problems not identified by title search and examination.
1110 - Owner’s Title Insurance: This fee covers the part of the title insurance policy that protects the owner against loss due to disputes over ownership of the property. The owner’s policy is not necessary for a refinance transaction as the existing policy remains in full force and effect, if obtained when you purchased your house, for as long as the owner owns the property.
1112 - Carrier Fee: A fee paid to an overnight delivery service for delivery of mortgage documentation.

Government Fees

1201 - Recording Fee: After you close, your mortgage is recorded at the county office to make record of your mortgage.
1202 - City/County Tax/ Stamps: You may be charged tax on your mortgage by the state the property resides in.
1203 - State Tax/ Stamps: You may also be charged tax on your mortgage by the state the property resides in.

Additional Settlement Charges

1301 - Survey Fee: Your lender may require a surveyor to conduct a survey of your property. A survey determines the exact location of the home and the lot line, as well as, easements and rights of way. This also protects you to ensure you have record of your property boundaries and size.
1302 - Pest Inspection Fee: This fee covers the cost of inspections for termites and other pest infestation.
1303 -1305 - Lead-Based Paint Inspection Fee: Houses built prior to 1978 may be required to have an inspection for lead-based paint hazards.

This information is adapted from "U.S. HUD" .