400 Creekside Drive, Suite 407-409 Pottstown, PA 19464

What Determines My PA Title Insurance Rate?

Monday, January 4, 2021

So, you're getting ready to buy your very first home and you stumbled across a term that you aren't so familiar with: title insurance. You know that when you buy a car, you get a title to show ownership... Isn't this pretty much the same thing?

Continue reading to learn how title insurance protects homeowners and/or mortgage lenders along with what factors influence your title insurance rate.

What Is Title Insurance and Why Do You Need It?

A title is a document that gives a homeowner the legal right to own their home. In Pennsylvania, title insurance comes in two policies: lender's title insurance and owner's title insurance. These policies are purchased with a one-time payment rather than other types of insurance that involves monthly payments.

A lender's title insurance policy protects the lender, also known as the bank or mortgage company. Owner's title insurance covers the homebuyer for the duration of time that they own the home. Having title insurance policies makes sure that the lender and/or the owner is protected from many issues that may arise.

When a homeowner purchases a title insurance policy, it protects the buyer from potential problems. This might include property line disputes or cases where the seller may not have had the right to sell the property among other things. While this is optional for homeowners, a lender's title insurance policy is not.

A lender needs a lender title insurance policy to make sure that when something goes awry in the sale, they don't lose the money that they invested. It is so important to have title insurance in the event that something like this happens.

What Factors Into Your Title Insurance Rate?

The title insurance premium that you're charged may vary based on many factors. In general, there are factors unrelated to the title insurance services offered as a part of the policy. They might include:

  • The property's geographic location
  • The house's cost, age, and condition
  • The history surrounding the property 
  • The loan amount
  • The title insurance agent
  • The option for extended coverage

The costs of these insurance premium rates are generally regulated by specific state laws. Pennsylvania is an all-inclusive rate state meaning that having title insurance covers the cost of a search and examination of land records, escrow and settlement services, and the potential risk of buying a home.

Other title insurance services might include documentation preparation, closing statements, endorsements. There may be additional charges in place by the government. There may be charges for the cost of wire transfers or the receipt and printing of documents outside of the original documentation prep and closing costs.

Purchase a Title Insurance Policy Before Buying a Home

Even though the title insurance rate may vary based on your specific situation, it is an important purchase when it comes to buying a home. It can protect you from any problems that might arise during the entire home buying process and until you decide to sell the home.

Contact Heartland Abstract today with any questions you may have about PA title insurance. We would be happy to answer your questions and provide you with a quote for your policy.

View All Recent Posts