8200 113th Street North, Suite 101, Seminole, Florida 33772
Who does Title Insurance Protect?
Title insurance protects you and your lender if someone challenges the title to your property. This may be in the form of an alleged title defect, which was unknown to you at the time you purchased the property, but came to light at some future date during your ownership of the property. A title insurance policy contains provisions for the payment of losses which result from a covered claim. The title insurance policy also covers legal fees in defense of a claim against your property. Coverage can benefit the homeowner or the bank or mortgage company (lender).
What does it cover?
The title insurance policy available to owners of real property in Florida is an American Land Title association ( ALTA ) policy.
Since title insurance is required by your lender, the lender will specify the type of policy required.
Who should purchase Title Insurance?
Lenders require title insurance as a condition for your loan.Two types of policies are available: an owner’s policy and a lender’s policy. A lender’s policy insures that the lender’s security interest in the property has priority over claims that others may have in your property. A lender’s policy does not protect you. Similarly, the prior owner’s policy does not protect you. If you want to protect yourself from claims by others against your new home, you will need an owner’s policy. An owner’s policy insures the buyer for as long as he or she owns the property. This protection is limited to the value of the property. It is usually less expensive to purchase a lender’s policy and owner’s policy at the same time from the same title insurer. Contact your title insurer for additional information.
How much do I need?
The homebuyer should insure the full purchase price of the property; the lender only requires title insurance to cover the amount of your loan.
What is escrow?
Escrow is a service which provides the buyer and seller with protection in the handling of funds and documents in the property transaction. Escrow enables the buyer and seller to transact business with each other through a neutral party. The “escrow holder” typically receives purchase funds from the buyer for deposit in an escrow account, prepares the deed or other documents, prorates taxes, interest, and insurance according to the escrow instructions, secures release of any contingencies imposed in the escrow, records deeds as instructed, requests issuance of the title insurance policy, prepares final accounting statements for the parties, disburses funds as authorized by the escrow instructions, and closes escrow when all of the escrow instructions of buyer and seller have been carried out.
Glossary of Terms:
Escrow Sale Fee
Escrow sales fee is the fee paid for the escrow process in a home purchase. It is not applicable to refinancing a home.
Escrow Loan Fee
It is a fee tied to the loan fee for a sale or purchase of a home. Some escrow companies require this fee. For a refinance, it is the fee paid for the escrow of a refinance transaction.
Title Homeowner’s Fee
It is a fee paid for the owner’s title insurance policy that protects the buyer of the home; not applicable in a refinance.
Title Lenders Fee
This is the fee charged for a lender’s title insurance policy that protects the lender’s security interest in the property.
Lender’s Policy
When you refinance your home or take out a new mortgage, the lender seeks protection for its investment by requiring the purchase of a lender’s title insurance policy to protect against losses resulting from claims made by others against your new home.
Owner’s Policy
Since a lender’s policy does not protect your financial interests, an owner’s title insurance policy is worth serious consideration. If someone has a claim against the title to your new home and you are not insured, the result could be financial disaster. Many insurers offer discounts when both the lender and owner policies are purchased at the same time.
Title Discount Definitions
Concurrent Rate Discount for Lender’s and Owner’s Policy
Title only – a discount may be applicable when purchasing a lender’s policy and owner’s policy from the same title company.
First Time Homebuyer’s Discount
Title and Escrow – usually relates to a one-to-four family residential property.
Professional Discount
Title and Escrow – title companies may offer this discount to professionals such as lawyers, engineers or teachers.
Senior Citizen Discount
Title and Escrow – a discount to buyers age 55 or older. Please visit the U.S. Housing and Urban Development Web site for additional information on RESPA and title insurance.
Short Term Rate
Title only – relates to the purchase of a new title insurance policy on a property that has been sold or insured within the last two to five years.
Subdivision Bulk Rate Discount
Title and Escrow – relates to the purchase of a new home sold by a developer or contractor selling multiple homes in a subdivision and using the same title and escrow company.
Office: 727.391.9200 Fax: 727.391.9211 EMAIL: Coastline101@Verizon.net
