When you purchase property, it’s crucial to make sure you have a clear and marketable title, meaning there are no outstanding claims or legal disputes that could affect your ownership rights. Title insurance protects homeowners and lenders against financial repercussions resulting from previously undisclosed claims or problems that are discovered after the property has been purchased. It’s very important to understand how title insurance works — including how long it lasts.
There are two kinds of title insurance: owner’s title insurance and lender’s title insurance.
- Owner’s title insurance protects the homeowner’s interests in the property title.
- Lender’s title insurance protects the lender’s interests in the property’s mortgage. Lender’s insurance is a prerequisite for most mortgage loans.
The length of time your title insurance lasts depends on which type of policy you have.
Owner’s Title Insurance
Owner’s title insurance lasts for as long as you own the property, unless you choose to terminate the policy sooner.
Owner’s title insurance is unlike many other types of insurance (such as car insurance) that require you to make monthly payments. Instead, you will pay a one-time premium for your title insurance at the time you close on your home. After you’ve paid this one-time premium, your owner’s title insurance takes effect for the entire duration of your ownership.
Lender’s Title Insurance
Lender’s title insurance works a bit differently than owner’s title insurance. Your lender’s policy will last only as long as your mortgage loan remains outstanding. Once you’ve finished paying off your mortgage, your lender’s insurance coverage will end (since your lender’s interest in your property will have ended as well).
If you elect to sell your property before you have made your final mortgage payment, you will need to pay off the loan in full at the time of the sale, and the lender’s policy will terminate.
What if You Refinance Your Mortgage?
If you decide to refinance your mortgage loan, your lender’s title insurance policy will terminate and you will need to replace it with a new lender’s policy to cover the new loan.
On the other hand, your owner’s title insurance policy remains in effect even if you refinance your mortgage.
Title Insurance in Florida
Title insurance provides invaluable peace of mind by safeguarding your property ownership rights against potential disputes. Whether you have an owner’s policy, a lender’s policy, or both, it’s very important to remain informed about the details and duration of your coverage.
Working with a reliable and experienced title insurance provider is the best way to guarantee a hassle-free experience. Florida homeowners can protect their investments by choosing Heights Title Services for all Florida title insurance needs. Get in touch with our team and find out why Heights Title is one of the most trusted names in Florida for high-quality, low-cost title insurance.