Buying a home is a major benchmark for many people. But the excitement of your purchase comes with a responsibility to protect your investment. One way to protect your home is with title insurance.
The short answer to the question, “Can I buy title insurance after closing?” is “Yes.” You can buy title insurance after you’ve already closed on your new home. In addition, you can still buy a policy after all of the paperwork has concluded. However, waiting until after your closing is not always a good idea.
If you decide to wait until after the closing is complete, any issues that occur after the closing, and before you buy the title insurance policy might not be covered. The in-between time frame is a lot of the risk you assume.
What Is Title Insurance?
Title insurance protects you against negative financial entanglements because of defects in a property’s title or ownership rights. In the State of Florida, title insurance works for you by thoroughly researching public records to identify any possible issues or defects in the property’s title history. This research is called a title search. The title company then gives you an insurance policy that covers the policyholder (you) against any disputes or claims that may emerge due to these issues.
The policy is valid for as long as you own the property and usually covers the full purchase price of the property. The two main types of title insurance are:
Lender’s Title Insurance: Mortgage lenders usually require lender’s title insurance to safeguard their investment in the property.
Owner’s Title Insurance: Owner’s title insurance is optional but still recommended for property buyers because it protects your investment and ownership rights.
Why Should I Buy Title Insurance?
There are several reasons why title insurance is a must-have purchase:
- It protects property owners and lenders from possible financial losses because of issues with the property title. This can include anything from simple mistakes in the public records to complicated legal disputes over ownership rights.
- Title insurance can provide you (and your lender) peace of mind by covering the cost of any legal defense or payment to resolve title issues.
These issues can appear at any time–even years after you purchased your home. This can result in expensive legal fees and loss of your investment.
When Is the Best Time To Buy Title Insurance?
Basically, the best time to buy title insurance can be broken down into two clear-cut phases:
Purchasing your title insurance before closing the deal allows you to have the insurance in place at the time you take ownership. An important benefit of this is that it provides coverage for any title problems that may come up before the property officially changes hands. These possible issues include:
- fraud
- forgery
- liens on the property
Besides the peace of mind it offers, buying before closing can be more cost-effective than waiting until after closing.
The other option for buying title insurance is after closing on the property. It’s largely recommended to buy title insurance before closing but it’s still possible to buy it after closing. One of the benefits of waiting until after closing is that it allows you to conduct a more comprehensive title search prior to buying the policy The search can help identify any issues with the title that might have been missed during the initial research.
Also, buying title insurance after closing in Florida can help people who weren’t aware of the importance of title insurance before the closing process. Although buying title insurance after closing might be more expensive, it’s still a feasible option for individuals who want to protect their property investment.
Is Owner’s Title Insurance Required in Florida?
In Florida, both parties must have valid title insurance to transfer property from one party to another. The law requires a title insurance policy, either owner’s or lender’s coverage. Although the law requires insurance, it doesn’t decree how much to buy. You need to work with your attorney and/or title company to determine the correct policy for your property.
If you’re buying a newly built home in Florida, you will still need title insurance to protect you against claims against title ownership and compensation for some financial losses. It’s also important to remember that a lender’s policy doesn’t protect you as a buyer. It’s recommended that you invest in an owner’s title policy to protect yourself against these common real estate legal issues.
Things To Consider When Buying Title Insurance
No matter when you decide to buy title insurance, there are some important factors to consider before choosing the right policy:
- Property Location: The area affects the potential risks linked to the title such as zoning restrictions and tax liens.
- Type of Property: Different types of properties have different types of risks.
- Previous Ownership and Transfer History: Issues with the title can come from mistakes or fraudulent activities that happened in the past.
- Legal Claims: Claims can come from a variety of sources including heirs that weren’t properly notified of the death of a previous owner or disputes between previous co-owners There may also be outstanding judgments or liens against the property.
- Cost of the Insurance: The cost will depend on location, property value, and type of policy you choose.
How Can Galaxy Title & Escrow Help You?
Buying a new home? It’s an exciting time but you need to take care of business first and that’s where Galaxy Title & Escrow can help you. Since we are located in Fort Lauderdale, FL, we know the applicable Florida laws. And we can prepare all the necessary documents, whether you’re a buyer or a seller.
You need legal and real estate expertise when making an important investment in your future. Galaxy Title & Escrow can provide that. By using our closing service, you can be confident that the property transfer, title insurance, and all of the closing costs are handled efficiently. Our convenient escrow service will help protect your deposit, reduce the fraud risk, and speed up the process of getting you into your dream home. Contact us. We welcome your questions.
Mitchell has been a licensed attorney since 2014 and has practiced in both the transactional and litigation fields of law. His experience allows him to approach every transaction with a depth of knowledge and practical experience most attorneys do not possess. Mitchell prides himself on providing top notch service to his clients.