Home Sale Services, Inc. (www.homesaleserviceinc.com) has released a series of articles addressing real estate settlement costs. The second article in the series relevant to title insurance.
One of the costs of buying real estate is title insurance. All lenders in Pennsylvania require title insurance when they provide funds (mortgages) to purchase real estate. Ensures that the property title of the property is free of claims that affect the property of the buyer. Protects the homeowner and lender from past mortgage and debt losses, judgments, mechanical liens, divorces, title defects, lost court documents, boundary disputes, unpaid taxes, and other hidden issues such as forgery or other . frauds
HOW MUCH?
In Pennsylvania, title insurance rates have been set by the state legislature. The premium is usually calculated on the value of the interest you are buying. The homeowner’s policy is issued at the time of property purchase and is based on full consideration, including the full amount of the outstanding principal of any mortgage or other liens, claims, taxes and any other municipal charges not pay. A policy may be issued for an amount greater than full consideration when agreed between the insurer and the insured.
The title insurance rate comes in three varieties. If a property has not had title insurance in the last ten years, the title insurance rate is the “Base Rate.” The purchaser of a title insurance policy will be entitled to a lower rate, called a “Reissue Rate” if the property to be insured is identical to, or part of, a property that obtained title insurance within the last ten years. immediately prior to the date of the insured operation.
There is a third, lower rate that is applicable to subdivision or condominium regimes. This rate is used when title insurance has been issued to a builder within ten years of application for title insurance and the builder sells completed units outside of the subdivision or planned unit development, cooperative, or condominium. In this case, the charge is 90% of the reissue fee. Attached to this article are sample title insurance rates for properties valued between $250,000.00 and $500,000.00. Home Sale Services will be happy to provide you with information on charges below $250,000.00 and above $500,000.00 or any other rate related questions. Call 610-489-3656.
SPECIAL TITLE INSURANCE RATES
There are a number of other less frequently used rates that apply in particular circumstances. One of them is when a loan policy is going to be issued within four years from the date of the mortgage or interest rate previously insured and the premises to be insured are identical, they are part of the previously insured real estate, and there have been no changes in full ownership. If all of those criteria are met, and the new loan policy is within two years of the original title insurance issue date, the new policy is 70% of the reissue rate and if between two and four years from the original title insurance issue date, it is 80% of the reissue rate.
When a policy on a construction credit mortgage has been issued and within six months of the completion of the building, the same mortgagor grants a new mortgage, the charge will be 50% of the reissue rate, provided that the new policy is being issued by the same insurer that issued the previous construction loan policy.
Title insurance may be issued on a leased property, and in that case, the amount of insurance must be equal to:
A. The total of the total rents payable under the lease; Prayed
B. the total of the total rents during the six years immediately following the liquidation or closing of the lease transaction; Prayed
C. a reasonable statement of estimated rents in percentage leases; Prayed
D. the appraised value at the time of insuring the property as established by an appraiser acceptable to the insurer; Prayed
E. the land and total project costs of such proposed improvements in the case of a proposed construction; Prayed
F. the purchase price of the farm when a lease is secured, including all the obligations assumed.
In addition to basic title insurance rates, all title insurance companies issue endorsements that provide coverage for specialized property problems, such as survey exceptions and condo concerns, and most lenders require two or three endorsements in each settlement. Endorsements are subject to additional charges to the title insurance applicant (Buyer). Those fees will be the subject of the next article in this series of memos addressing the costs of a real estate deal.
Home Sale Services, Inc., (www.homesaleserviceinc.com), is a company that writes Agreements of Sale for clients who do not use real estate brokers to handle the sale or purchase of a home. The company specializes in assisting you with the purchase or sale of your home. We charge a flat fee for the services provided. We are not real estate brokers. We have attorneys and staff with experience in the home sales industry. We limit our services to Pennsylvania and additionally to the following Pennsylvania counties: Montgomery, Chester, Berks, Bucks, and Delaware counties. Home Sale Services provides a professionally drafted Agreement of Sale and the Pennsylvania required Seller Ownership Disclosure Statement. The flat fee for this service is $750.00.