Title Insurance Bankrate Caret RightMain Menu Mortgage Mortgages Financing a home purchase Refinancing your existing loan Finding the right lender Additional Resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Bank Banking Compare Accounts Use calculators Get advice Bank reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Credit Card Credit cards Compare by category Compare by credit needed Compare by issuer Get advice Looking for the perfect credit card? Narrow your search with CardMatch Caret RightMain Menu Loan Loans Personal Loans Student Loans Auto Loans Loan calculators Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Invest Investing Best of Brokerages and robo-advisors Learn the basics Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Home Equity Home equity Get the best rates Lender reviews Use calculators Knowledge base Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Loan Home Improvement Real estate Selling a home Buying a home Finding the right agent Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Insurance Insurance Car insurance Homeowners insurance Other insurance Company reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Retirement Retirement Retirement plans & accounts Learn the basics Retirement calculators Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Advertiser Disclosure
Advertiser Disclosure
We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. SHARE: On This Page
eakkarat rangram/Shutterstock June 09, 2022 Checkmark Bankrate logo How is this page expert verified? At Bankrate, we take the accuracy of our content seriously. "Expert verified" means that our Financial Review Board thoroughly evaluated the article for accuracy and clarity. The Review Board comprises a panel of financial experts whose objective is to ensure that our content is always objective and balanced. Their reviews hold us accountable for publishing high-quality and trustworthy content. TJ Porter is a contributing writer for Bankrate. TJ writes about a range of subjects, from to . Suzanne De Vita is the mortgage editor for Bankrate, focusing on mortgage and real estate topics for homebuyers, homeowners, investors and renters. Robert R. Johnson, Ph.D., CFA, CAIA, is a professor of finance at Creighton University and chairman and CEO of Economic Index Associates, LLC. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our mortgage reporters and editors focus on the points consumers care about most — the latest rates, the best lenders, navigating the homebuying process, refinancing your mortgage and more — so you can feel confident when you make decisions as a homebuyer and a homeowner. Bankrate logo Editorial integrity
Bankrate follows a strict , so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. Key Principles
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers. Editorial Independence
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate logo How we make money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. If you’re like most, your home will be one of the largest purchases you make in your lifetime. The last thing you want is an unexpected issue regarding ownership of the home after you complete the transaction. That’s where , an important policy for homebuyers, comes into play. Lightbulb 2022 title insurance statistics Lender’s title insurance typically costs 0.5 percent to 1 percent of the property’s sale price. Owner’s title insurance is usually a few hundred dollars. The average lender’s title insurance policy costs $350 for every $100,000 of the mortgage, according to , one of the leading title underwriters in the U.S. The average owner’s title insurance policy costs $250 for every $100,000 of the home’s purchase price, according to First American. Despite climbing home prices, the cost of title insurance has decreased 7 percent since 2004, according to the . What is title insurance
Title insurance protects mortgage lenders and homebuyers against problems with a once ownership is transferred. If a title dispute arises during or after a sale, the title insurance company might be responsible for paying specified legal damages, depending on the policy. The title to a home refers to the legal rights the owner has to the property. When you buy a home, you’ll want to ensure the property has a and is free from or any other ownership claims. If not, as the new owner, you could be responsible for remedying these issues if you don’t have title insurance. When getting a mortgage, lenders typically require the borrower to obtain a lender’s title insurance policy (sometimes called a loan policy), which protects the lender should claims to the property arise. Owner’s title insurance, a separate policy, is usually optional. This protects the buyer from any claims to ownership. Some states have fixed lender’s title insurance premiums, while others are dictated by the market, giving homebuyers freedom to shop around and .
How title insurance works
Getting title insurance is generally a two-step process. First, a performs a to ensure the property you want to purchase has a clear title. In short, confirming a clear title means making sure that the party selling the property truly owns it and has the right to sell it. If a defect or other issue arises, the title company will make you aware of it. Once the company completes the search, it assesses any issues, as well as potentially previously undiscovered ones, and then offers a quote for a title insurance policy based on those risks. If a title has many defects, the company might decline to offer a policy.
Types of title insurance
Lender’s (loan) title insurance Owner’s title insurance Protects the lender from liability, usually for the life of the mortgage Typically required Cost ranges between 0.5 percent and 1 percent of the loan Doesn’t protect the buyer from future title disputes Usually optional, but highly recommended Typically costs a few hundred dollars Can help cover costs of any future title disputes What does title insurance cover
Title insurance can protect the lender and the homebuyer from having to fix , such as: Liens stemming from contractors who worked on the home and weren’t fully paid, unpaid homeowner’s association dues or other outstanding debts A falsified or forged deed or documents and other fraud-related issues Encroachments Disputes pertaining to ownership, such as an unknown heir For example, if you buy a property from a deceased person’s estate, and an unknown heir later makes a claim that they own the property and that it was improperly sold to you. The title search process would have likely turned up evidence of the heir before the transaction closed. If not, title insurance would help cover costs related to settling the heir’s claim.
How much does title insurance cost
Lender’s title insurance is a one-time premium that averages between 0.5 percent and 1 percent of the home’s value, but prices can vary by state. The premium is usually paid at . Owner’s title insurance is a separate policy that typically costs a few hundred dollars. Is title insurance worth it
Title insurance policies protect the lender and you from lawsuits related to property ownership disputes. While the cost might not seem worth it, it’s a shield against possible future litigation. Risks of not having title insurance
Mortgage lenders almost always require homebuyers to purchase a lender’s title insurance policy. To protect yourself from having to be responsible for title issues, you also have the option to purchase owner’s title insurance, which is separate from the lender’s policy. If you don’t purchase owner’s title insurance and an issue turns up in the future, you’ll likely be responsible for correcting it, which can be costly. For example, if the previous owner had unpaid property taxes, the municipality might place a lien on the property, which can’t be removed until the back taxes are paid.
How to buy title insurance
You can purchase a lender’s title insurance policy through a title company of your choice. Note that your lender or real estate agent might recommend a company, but you’re not obligated to use that provider. If you pay cash for the home or otherwise don’t finance the purchase with a mortgage, you’re not obligated to buy a lender’s title insurance policy. How to shop for a title company
You’re not required to work with the title company your lender or real estate agent recommends, so shop around. You might find that your lender’s affiliate has the best coverage or lowest cost, or learn that another company has a better offer. You also might want to use a different title company than the one the seller chose, so that a different business can conduct the title search. Overall, you’ll want a reputable, stable enterprise that you can expect to be around decades after you buy your home. As you compare providers, don’t be afraid to ask prospective companies if they’ve had any claims and if they have any insurance protection in place for their own business. Also, ask the title company if you’re eligible for discounts. It might offer programs for first-time homebuyers, for instance, or other ways to help you save money. SHARE: TJ Porter is a contributing writer for Bankrate. TJ writes about a range of subjects, from to . Suzanne De Vita is the mortgage editor for Bankrate, focusing on mortgage and real estate topics for homebuyers, homeowners, investors and renters. Robert R. Johnson, Ph.D., CFA, CAIA, is a professor of finance at Creighton University and chairman and CEO of Economic Index Associates, LLC. Related Articles