Purchasing a new home is a big investment. First-time and seasoned home buyers alike can experience sticker shock with the costs of closing. One of these costs includes title insurance. So, how is title insurance calculated and what can you expect for your closing costs?
What is title insurance?
A title insurance policy protects you and your lender from title issues. Your policy will cover any problems uncovered in a title search including liens against your property, disputes between prior owners over wills, clerical mistakes in courthouse documents, or fraudulent claims against the property.
How is it typically calculated?
Title insurance is based on the value of your property. Other factors that can affect your rate include the results of your title search, examination, and expected costs of any title defects. Title insurance is calculated by taking your insurance rate (determined by your title insurance company) and multiplying per thousand of your purchase price.
For example, if your title insurance rate is 0.07% and your purchase price is $200,000, your title insurance cost would be $ 1400.
How do you find a title insurance company?
While some states regulate the title insurance industry, in most states you can shop around for title insurance and find the best rate for your home purchase. You can find possible savings by using the same title insurance company as your lender. Each title insurance company should provide a detailed quote to help you make the best decision.
Here at Twin City Title Company, we're here to help. Browse our FAQs to better understand title insurance or use our title calculators to get an estimate of your title insurance costs.