Title and Title Insurance

Title and Title insurance are two different things. Title is usually referred to as the title company.  Title Insurance is an insurance policy which protects your ownership right to your home.  As part of the title process, the title company will do a title search.  The purpose of the title search is to verify any unpaid liens against the property and any outstanding debts such as taxes and homeowners associations. The title company will receive the search back and submit to a company requesting insurance on the property.  The insurance covers fraudulent claims against ownership and mistakes from earlier sales as well as mistakes from the title search. The title insurance also covers misspellings of a person’s name or an inaccurate description of the property. In Orange County Florida it is customary for the seller to buy the policy on the buyer’s behalf.  The buyer will also need to buy another policy for the lender for financed purchases.

Mortgage lender will need Lender Policy.

Title insurance protects the lender (and the secondary markets to which they sell loans) from defects in the title to your home—which could include mistakes made in the local property office, forged documents, and claims from unknown parties. It ensures the validity and enforceability of the mortgage document. The amount of the policy is equal to the amount of your mortgage at its inception. The title fee is a one-time payment rolled into closing costs.

Two different policies you buy.

The first policy is the one your lender will need. This policy protects the lenders investment. The second policy is an owner’s policy that provides coverage up to the purchase price of the home you are buying.

You can choose your provider.

You have the right to shop around and pick your title insurance rate. While their are sites online that offer this service, the majority of insurance policies written in the Windermere, Dr Phillips, Ocoee, Winter Garden, Gotha, and Orlando area are underwritten by the same 2 companies. The seller or seller’s agent typically picks a title company. The seller’s agent usually picks a company they are familiar with and now have a good working relationship. The majority of the time the fees are all fairly similar between title companies.  If you shop around for a cheaper title policy, the most title companies will honor a cheaper rate provided by another company. You also may be eligible for a discount. Discounts are sometimes available if the home has been bought within 3 years since the last purchase as not as much work is required to check the title.

New construction needs coverage.

The title insurance covers the property and the home all the way back to when the land in Florida was purchased. Your home may be brand-new, but the land isn’t. There may be claims to the land or liens that were placed during construction that could negatively impact your title. It is very common that builders and their construction vendors put mechanics liens against a property during the construction process. Swimming Pool companies also typically put a mechanics lien against a property. These are all items the title search will find and cover with the title insurance.