Lenders Title Insurance Fee: What You Need To Know

Posted by Heartland on 16th May 2022

Did you know that the current title insurance market size stands at $22.0 billion? Following the increased growth in the mortgage industry, title insurance fees are now mandatory.

What is a lender's title insurance fee? These are indemnity policies that protect the lender from arising claims in the ownership of the property. The insurance covers the insured party from losses or costs incurred from such problems.

Before getting the title deed to your land, the title company runs a check on the property. The aim is to disclose any inconsistency in the land’s ownership history.

Below we give you a scope of all you need to know about the lenders' title insurance fees.

IMPORTANCE OF TITLE INSURANCE FEES

So, why do you need title insurance? The lenders' title insurance fees can compensate you in case of unreported liens and easements on your property. The insurance covers the costs involved in perfecting the transfer of title rights.

It also compensates you in places where you lose your property following forgery in the transfer of ownership. The coverage can also protect you in scenarios where there were errors in filling or documentation of your title.

COST OF TITLE INSURANCE FEE

The cost of the title insurance fee depends on your location and the amount of money you're borrowing. Typically, most title fees cost around 2-5% of the total loan amount. The following are types of title fees you may encounter:

Titles search fee: Covers the cost involved in examining the public records to determine the preexisting succession of the property.
Title settlement fee: This caters to the administrative cost of closing the deal.
The lenders' title insurance fee: Protects the mortgage company from future land claims on your property—the title insurance cost ranges between 0.5%-1% of the sale price.
Recording fees: These cover costs associated with the filling and documentation of the title

WHO PAYS THE TITLE FEES?

This decision depends on the location of the property. In some areas, the buyer pays the owner. In other areas, it's vice versa. However, you can always negotiate the terms in the purchase contract.

Both parties can get into a seller's concession. The buyer can request the seller to cover some or all of the closing costs in the agreement.

WHERE CAN I PURCHASE TITLE INSURANCE?

Before buying a property, it's essential to hire the best title insurance company to handle the transfer of credentials. The company should break down the closing costs and title service fees.

Growth in the insurance industry has created an online platform where you can estimate the closing fees by simply providing your mortgage information. You can compare the prices for lenders and homeowners' title insurance costs. This action will help you land the best insurance company.