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Understanding the Home Title Insurance Cost: 5 Ways You Can Save

Monday, April 19, 2021

Over 900,000 homes were sold in the U.S. in July 2020. The average amount of time it takes for a homebuyer to buy a property is about 30-45 days. 

If you're a homebuyer, you might want to better understand the home title insurance cost. While the cost might seem to add up fast, there's hope.

This article will go over the various ways you can save on your title insurance. Read on to explore these ways, and say hello to a great deal today. 

What Is Title Insurance?

Title insurance is there to protect the lender, and at times, the owner from possible loss of property. This can occur when someone else takes ownership after closing. 

Before title insurance, you had to make sure that the title by the seller was valid. Sometimes it'd be found to be invalid later on. 

Title insurance protects against defects in the title that can include:

  • Liens by contractors
  • Forged signatures
  • Omissions or errors in deeds
  • Missing heirs
  • Undisclosed heirs
  • Errors in examining records
  • Liens for unpaid taxes

They'll search public records such as:

  • Court judgments
  • Maps 
  • Liens
  • Tax records
  • Divorce decrees
  • Wills
  • Mortgages
  • Deeds
  • Encumbrances

Under title insurance, there are 2 types of insurance, the home owner's and home lender's policy. The home owner's policy protects the homeowner during any title disputes. 

Renovations aren't included in this policy. It covers any legal fees that occur for defending the claim to the title. It lasts for as long as the homeowner or their heir owns the property. 

The home lender's policy lasts for the length of the mortgage. It protects the lender in a title dispute. 

1. Shop Around

When title insurance occurs, first there's a search of the property's title history. Any errors or problems for the deed will be researched. Next, an insurance policy will be underwritten to protect the buyer from any issues. 

Before choosing one title insurance company, it's a good idea to shop around and find the right one for your needs. Write down all of the information from each company to make a decision about which is the best option for you. 

 

2. Ask the Buyer To Pay for It

While this was once unheard of, as the market is geared more for buyers than sellers, you might feel you can ask the seller to pay for the title insurance. Sellers might be more motivated to negotiate and pay for the title insurance. 

You can also consider asking the seller for a reduced purchase price or home warranty. Ask the seller to pay a certain amount of your closing costs instead of the title insurance. 

3. Negotiate Add-Ons

Add-ons can include mail and courier charges, costs for searches and certificates, and copy fees. These add-ons can be negotiable. Contact your title insurance company, and ask about how you can have some fees removed. 

4. Simultaneous Issue Rate

You'll buy title insurance to protect yourself as the homebuyer. Your mortgage company might require that a separate insurance policy will be issued in the lender's name. If this is required, it'll be the homeowner's requirement to pay for both of these. 

If they're sent out at the same time it's known as a simultaneous issue rate. This means there's a discounted premium for your insurance as the homebuyer. 

The cost for both of these policies might be much less than if you purchase them by themselves. Speak with your lender's office about this option. 

5. Closing Cost Discounts

If you can't find any wiggle room for title insurance, keep in mind that some lenders might be able to offer you a discount on closing costs. Besides comparing title insurance companies, you'll want to compare lenders. Your lender might be able to offer what's known as a lender credit if you agree to a higher interest rate. 

This can save you money if you stay in the home long term. It can also save you money overall on any upfront costs. 

Is Title Insurance Worth It? 

Yes! While extra costs aren't enjoyable, it'll protect you from title issues in the future. Speak with a title insurance company today to get signed up.

What's Not Covered by Title Insurance? 

Deferred maintenance and repairs aren't covered by title insurance. Instead, you'll need to buy a homeowner's insurance policy to protect your home from natural disasters. 

Can You Pick Your Own Company?

Yes. A lender might suggest that you go with their insurance company, but you get to choose who you go with. It's a good idea to shop around in order to protect yourself from errors. 

Title Insurance in Pennsylvania

Many lenders in Pennsylvania will require you to have title insurance. Title insurance is regulated by the Pennsylvania Insurance Commission. First, they take a look at your mortgage and sales price and base it on whichever is higher. 

If you're paying cash for the property, you aren't required to have title insurance. Even though it's not required, it's still a good idea to have. You pay for the title insurance at closing, and the homebuyer normally pays for it even though the seller can as well. 

Saving on Home Title Insurance Costs

Now that you've explored the home title insurance cost and how you can save, you should have a better idea of what to expect. Are you a homebuyer who is ready to protect yourself and your home with title insurance?

Contact us today. We offer services in all 67 counties in Pennsylvania. We'll work with you to come up with an action plan that best meets your needs. 

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