Why is Title Insurance Important?
Many buyers have asked the question: why do we need title insurance? Why can’t we just transfer title with a Quit Claim Deed? It’s simple. Anyone who purchases a property should protect their investment. How do you know there are no liens against the property you are acquiring? Purchasing an Owner’s Title Insurance Policy in your name will protect you from any liens any prior owner may have tied to the property you are trying to purchase.
There are many types of liens that can be recorded against your property. For example, if a previous owner failed to pay their taxes, the IRS will place a lien on your property. If a previous owner underwent a divorce and failed to pay their attorney, a charging lien can go against your property. What if a previous owner decided to transfer title and didn’t pay the appropriate transfer taxes to the state? The state can record a lien on your property. Other liens from a prior owner such as Mortgages, homeowner associations Claim of Liens, Notice of Commencements, Bonds, Child Support liens, credit card judgments or any other certified judgment can implicate you financially if you are not protected with an Owner’s Title Insurance Policy.
Obtaining an Owner’s Title Insurance Policy is a one-time cost when you purchase a property. You are protected by the same policy as long as you own the property. Title insurance premium is calculated as a promulgated rate based on the purchase price and these rates are regulated by the State of Florida Department of Financial Services. Therefore, no matter what title company you use, your owner’s title insurance premium is the same amount and cannot change.
How Can You Save Money on Title Insurance?
Many title companies may not advise you of this but there is a lesser premium you can pay, the Re-Issue Rate. In order to qualify for the Re-Issue rate on a purchase transaction, the previous owner would need to provide their complete Owner’s Title Insurance Policy that is 3 years old or less. However, if you refinance your mortgage in the future, there is no limit of years to qualify for a re-issue rate. Since your new lender will require a Lender’s Title Insurance Policy you will need to pay for title insurance again based on the loan amount. However, if you provide your Owner’s Title Insurance Policy you will qualify for a reduced rate.
Policy at Closing
Typically, when you close on a property and receive copies of your closing documents, the most important document – title insurance policy, is not included in your copy package. Title companies traditionally, send out the Warranty Deed and related documents to the courthouse for recording. Once they receive the recording documents back from the county’s recording office, they will then issue the policy. Many times title companies get backed up in their post-closing department and may take them weeks or even months to send the new owner their title insurance policy. This is why homeowners when asked for their prior policy, they cannot locate it. They tend to look in their closing package that was given at the time of their closing. However, since the policy arrives months after closing, people tend to misplace it.
At Title Quest Investments we are changing the traditional system. Now the new owner will receive their title insurance policy at closing, along with copies of their closing documents, all in one folder. We immediately e-record your documents and issue the policy within a 24 hour period after closing is complete and funded. This is the kind of exceptional service we provide and another reason why you want to choose Title Quest Investments for your next closing.