Costs Of Settlement – Title Insurance

Home Sale Services, Inc. ( has launched a series of articles addressing the costs of real estate settlement. The title insurance is the second article in this series.

Title insurance is one of the expenses associated with a real property purchase. All lenders in Pennsylvania require title insurance when they provide funds (mortgages), to purchase real property. This insurance insures that there are no claims against the title of the real estate. It protects both the lender and the owner from past mortgages and debts.

What is the cost?

The state legislature has set the rates for Pennsylvania title insurance. The value of the interest you are buying is usually the basis for the premium. The owner’s policy is issued when the property is purchased. It is calculated on the total consideration including any unpaid principal sums of any mortgages, other liens, claims and taxes. The policy can be issued for more than the full consideration if the insured and the insurer agree.

There are three types of title insurance rates. The “Basic Rate” title insurance rate applies to properties that have not had title insurance in the last ten years. If the title insurance policy is purchased by a purchaser, the rate called the “Reissue Rat” will be applied. This is if the property being insured is identical or part of property that has had title insurance in the ten years immediately preceding the insured transaction.

A third, lower rate is available for condominium or subdivision regimes. This rate applies if title insurance is issued to a builder in the ten-year period following the application for title insurance. The builder then sells the completed units from the subdivision, planned unit development, cooperative, or condominium. The reissue rate is 90% in this case. This article contains examples of title insurance rates applicable to properties with a value between $250,000.00 – $500,000.00. Home Sale Services is happy to answer any questions about rates, including information on charges for properties valued below $250,000.00 or above $500,000.00. Call 610-489-3666


In certain circumstances, there are other rates that may be applicable, but they are less common. A loan policy must be issued within four years from the date of an previously insured mortgage or fee. The premises that are to be insure are identical to or are part of the real property previously insured. There has not been any change in fee simple ownership. If all of these criteria are met and the new loan policy is issued within two years from the original title insurance date, it will be 70%. If it is two to four years after the original title insurance date, it will be 80%.

If a policy was issued for a construction loan mortgage policy and the same mortgagor executes another mortgage within six months, the charge shall not exceed 50%, provided that the new policy issued by the same insurer as the original policy.

Title insurance can be issued for a leasehold property. In that case, the amount of the insurance must equal:

A. A.

B. The total rental income for the six-year period immediately after the closing or settlement of the lease transaction.

C. A reasonable statement of estimated rents for percentage leases;

D. The appraised value of the premises at the time of insurance, as determined by an appraiser acceptable for the insurer;

E. The land and total project costs for such improvements in the case a proposed construction;

F. The purchase price of an estate for insuring a leasehold estate assignment, including all assumed obligations.

All title insurance companies offer endorsements which provide coverage for specialized issues like condominium concerns or survey exceptions. Most lending institutions require at least two to three endorsements at each settlement. Additional charges may be incurred by the title insurance applicant (Buyer) for endorsements. These charges will be discussed in the next article of this series on memos that address the cost of a real-estate settlement.

Home Sale Services, Inc., (, is a company which writes Agreements of Sale for clients who are not utilizing real estate brokers to handle their sale or purchase of a home. This company is specialized in helping you sell or buy your home. Services are charged at a flat rate. We are not real-estate brokers. Our staff includes attorneys and people who are experienced in the home selling industry. Our services are limited to Pennsylvania, and we also serve the following Pennsylvania counties: Montgomery, Chester Berks, Bucks, Delaware Counties. Home Sale Services offers a professionally drawn Agreement of Sale as well as the Seller’s Property Disclosure statement required by Pennsylvania. This service costs $750.00 flat fee.