Title insurance Title insurance

Title Insurance For First Time Home Buyers

30 Oct 2020

Title insurance is an important tool to protect mortgage lenders and buyers from financial losses in real estate transactions.

Whenever there is a contract to buy/sell a house, a title agent is hired. Their duty is to search in the local jurisdiction’s land records. They look for any claims, liens, conflicts, or encumbrances that should be settled before the transfer of the property.

Besides, the buyer needs an additional measure of protection by purchasing title insurance from a reputable insurance company.

The Importance of The Title Insurance

In spite of being optional for the owner, a person who takes a mortgage to purchase it is required by most lenders. The title insurance policy protects the lenders’ own interest and liability.

Title agents and insurers in SW Florida are regulated by the federal government and the state government of Florida. However, cheating or mistakes may occur, which can cause large financial damages for property owners.

The title insurance policy protects you if deeds or deeds of trust releases are incorrectly filed, lost, or fraudulent. All according to the National Association of Insurance Commissioners (NAIC).

What Scenarios Are and Are Not Covered?

A standard title insurance policy may cover:

  • Forged documents
  • Fraudulent sellers
  • Certain problems missed during a title search
  • Improperly filed documents
  • Unknown heirs

Some issues must be managed by the seller, as problems with the neighbors or with the structure of the house itself.

Common scenarios that a title insurance policy will not cover include:

  • Zoning problems
  • Boundary line disputes
  • Post-policy claims
  • Environmental protection laws

If these problems are not resolved before the title search process is closed, the financial responsibility for correcting them rests with the buyer, as established by the Consumer Financial Protection Bureau.

What Is The Cost of a Title Insurance?

According to the National Association of Realtors, the cost averages about $1,000 for property owners. However, the cost varies with state, loan amounts, and property value. Florida has fixed premium prices, regardless of your situation.

What Is Covered?

When claimed, the title insurance policy would cover the costs and damages that are associated with the problem. The situation will be analyzed by a special team, if it is considered legitimate, the insurance will be granted.

Remember that this policy only covers the issues which could have occurred prior to the transfer of the property to you. It does not cover anything that happens after the property is officially yours.

Who Pays For It?

Most lenders expect buyers to pay for their title insurance policy in addition to the buyer’s policy. Even if the estimate costs are disclosed in a Closing Disclosure or Good Faith Estimate, they may change depending on the final terms. Besides, the lender’s title insurance policy is normally lower than that of the buyer since their cover reduces with time.

Do You Need Help?

As you can realize by now, a title insurance may help a lot when buying a house. We are here to help you purchase one the best possible way. Do not hesitate and call us to (305) 901-5628 or contact us through Info@MarinaTitle.com. We will be glad to assist you!

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