Title insurance is a crucial aspect of real estate transactions that provides protection and peace of mind to both buyers and lenders. In South Florida, where the real estate market is thriving, understanding the ins and outs of title insurance is essential. To help you navigate this topic, The Victoria Law Group has compiled a list of ten frequently asked questions about title insurance in South Florida.
Title insurance is a form of indemnity insurance that protects homeowners and lenders against financial loss resulting from defects in a property’s title. It ensures that the property you’re purchasing has a clear and marketable title.
Title insurance protects you from various risks, such as undisclosed liens, forgery, fraud, errors in public records, and other title defects that could threaten your ownership rights. Without it, you could face legal issues or financial losses down the line.
The cost of title insurance varies depending on the property’s value and the policy type. In South Florida, the premiums are typically based on a percentage of the property’s purchase price and promulgated by Florida law. It’s a one-time payment made at closing.
The purchase of title insurance varies in Florida by County. In South Florida (Miami-Dade and Broward), it is customary for the buyer to purchase both owner’s title insurance and lender’s title insurance. However, the negotiation of who pays for these policies can vary depending on the terms of the real estate transaction and the county in which the property exists.
The owner’s title insurance protects the homeowner’s investment in the property. It covers losses due to title defects, such as undiscovered liens, forgery, fraud, and errors in public records.
The lender’s title insurance protects the lender’s interest in the property. It ensures that the lender’s loan is valid and enforceable in case of title defects.
Both the owner’s and lender’s title insurance policies provide coverage for as long as you or your lender has an interest in the property. This means that the coverage lasts as long as you own the property or have an outstanding mortgage on it.
While title insurance is not legally required in South Florida, most lenders will require the lender’s title insurance as a condition of granting a mortgage. Owner’s title insurance is optional but highly recommended to protect your investment.
In South Florida, the buyer typically has the right to choose the title insurance company. It’s essential to select a reputable and experienced title insurance company that can perform a thorough title search and provide comprehensive coverage.
When refinancing a mortgage, a new lender’s title insurance policy is usually required. However, you may be eligible for a reissue rate discount on the owner’s title insurance policy if you can provide the previous policy and meet specific criteria.
In conclusion, title insurance plays a vital role in protecting homeowners and lenders in South Florida. By understanding the fundamentals of title insurance and seeking guidance from a trusted title insurance company, you can ensure a smooth and secure real estate transaction in this vibrant region.
