Smart Money: Is title insurance necessary when buying a home?

DEAR BRUCE: I am planning on purchasing a home for $120,000. My lender requires a lender title insurance policy. Do I need to purchase an owner’s title policy? Everyone tells me that I don’t need one because if the title is clear for the lender then it should be clear for the owner. — Reader, via e-mail

DEAR READER.: Why do you suppose the lender requires the title insurance? Because they know that from time to time problems arise. The fact is that it will cost you relatively little to extend the title insurance to you and it will be with you as long as you own the home. I would never ever consider purchasing a piece of property that I didn’t have a title policy on. I hope you will consider doing the same.

DEAR BRUCE: We need to do some home improvement to our home. Finish off our basement, redo our kitchen and carpet the entire house. I will be getting $15,000 at the end of the month. Should I invest the money and then do the improvements? We only owe $60,000 on our home. My husband earns $40,000 a year and I work part-time. — K.D., via e-mail

DEAR K.D.: I doubt seriously if you can accomplish a large portion of the things you want to do with $15,000. Just the carpet alone could come close to depleting your money. You should make a priority list to see which is the most important improvement that has to be done. Then consider a way of getting these things done and paying for them on a time-extended basis.

Depending on how long you’ve had your home, you may be able to finance it at a more favorable interest rate and borrow a little extra money to get these improvements done.