Florida Title Insurance Costs
Every intending homebuyer wants a seamless purchase process without any hitches. However, on some occasions, certain problems may come up in relation to the property title. In such a situation, you want to be protected so that you are not financially affected. This is where title insurance comes in. So, how much does title insurance cost in Florida?
Title insurance in Florida costs between $500 and $1500, and it’s worthy of note that the rate is set by the Florida State Government. It is also a mandatory requirement in the state of Florida. Usually, the exact amount that you end up paying is determined by the property‘s purchase price:
- $5.75 per thousand for properties priced up to $100,000
- $5.00 per thousand for properties priced between $100,000 to $1,000,000
- $2.50 per thousand for properties priced between $1,000,000 to $5,000,000
- $2.25 per thousand for properties priced between $5,000,000 and $10,000,000
- $2.00 per thousand for properties priced in excess of $10,000,000
For instance, a $100,000 property would be accompanied by a $575 title insurance fee. On the other hand, you would pay $1,500 as a title insurance fee for a $300,000 property. All other calculations are conducted in a similar fashion.
What is Title Insurance?
Title insurance mainly protects both the lender and homebuyer from the financial implications that a faulty title can bring about. Title insurance would typically ascertain legitimate rights, interest, and vested ownership in a property.
This indemnity insurance effectively safeguards you from encumbrances as well as previous claims made on said property. Consequently, you would not be financially implicated in liabilities arising in the future as well as any claims which are linked to title issues.
For instance, if you find out post-closing that some property taxes were left unpaid by the previous owner, the policy you took out shields you from the burden of paying off this debt. In the absence of this policy, you would have to either pay out of your pocket or potentially deal with the risk of your property being foreclosed on.
There are two types of title insurance:
- Owner’s Title Insurance
- Lender’s Title Insurance
Owner’s Title Insurance
The owner’s title insurance is often bought by the seller and serves to protect the interest of the homebuyer. In the event that there is an open claim against the property, the insurance policy shields the buyer.
In essence, the owner’s title insurance would protect against claims that could potentially impact the homebuyer’s equity in the property.
Claims against the property could come in various forms including the following:
- Judgment lien
- Tax lien
- Environmental lien
- Payments owed to a contractor(s)
- Notice of pending legal action
- Previously recorded mortgage
Lender’s Title Insurance
The lender’s title insurance is paid for by the buyer to protect the interests of the lender. It does not extend to protect either the homebuyer or the seller.
Any claims made against the property that could potentially impact the loan are covered by the lender’s title insurance.
Upsides To Having Title Insurance
Title insurance might seem like just another added expense in the homebuying process. On further inspection, you would come to find that it is one that can save you a great deal in the long run. Here are some of the benefits that accrue to taking out title insurance:
Speeds Up Transaction Time
Every homebuyer loves a speedy closing. You definitely do not want to be stuck in a long-drawn-out process that consumes your time and resources as well. With title insurance in place, you can be less bothered about problems arising from the title and focus instead on other aspects of the transaction.
Once the seller agrees to your terms, you could round up the purchase process in a matter of days. Thankfully, title insurance would help determine and uncover any outstanding and previously unknown claims against the property. Unpaid property taxes, and disputes, amongst others, are brought to light by title insurance.
Mitigates Potential Losses
A title report which details all legitimate claims to property ownership usually plays a huge role in determining whether or not you buy a property. If this report is inaccurate in any way, refinancing or selling your home can be difficult or impossible. In such a scenario, having title insurance can effectively help to mitigate potential losses stemming from title faults.
Highlights Problems Early
Title insurance can help to expose problems with the property you are about to purchase. In this case, the earlier the better especially if you are dealing with a title issue. Title insurance guarantees that the property documents would be reviewed thoroughly and any issues would be highlighted.
You might need to hire legal counsel here, which is easier if you are covered by a title company. Also, if you need to negotiate with contractors or your lender pending the purchase, you are granted ample time to do this.
Minimizes Risk
Having title insurance in place leaves you to rest assured that any potential problems with the title would be taken care of. This includes a range of issues including the following:
- Anonymous lien holders
- Forgery
- Missing heirs
- Fraud
This is one of the reasons why lenders insist on purchasing a title insurance policy.
Handles Legal Expenses
Following your purchase of the home you love or near closing, it can be something of a nightmare to suddenly be faced with recently exposed issues that could cost you significantly. Given that you just spent potentially hundreds of thousands on the purchase, there’s a good possibility that you are low on cash.
Thankfully, the title insurance policies in place would cater to legal payments involved if your property or the title has issues such as:
- Tax liens
- Title defects
- Concealed easements
- Existing encumbrances
- Fraudulent transfer claims
This is why it is vital to deal with a reputable title insurance provider. On the flip side, you could avoid these troubles by simply dealing with a top-tier title search company that would provide an accurate report. This way, you can be insured, but avoid the hassle of legal troubles.
Conclusion
Title search insurance is mainly in place to provide protection. However, when problems arise, you might still be affected in various ways such as extending closing time or losing out on the property entirely. This is why having a comprehensive title search conducted by a reputable company is your best bet.
