Is Title Insurance Required in PA? 6 Things to Know As a Homeowner

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Title insurance is an important part of buying a property. This type of insurance is needed because it protects the homeowner and mortgage lender against disputes. Without it, there can be legal disagreements over the property’s rightful owner. 

Given how vital title insurance is to a sale, we’ve outlined everything there is for you to know about it below.

 

Title Insurance and PA

 

In PA, title insurance premiums are regulated by the State Department of Insurance. 

This means that all title insurance companies who are members of the state rating bureau must apply the state’s approved rates. 

In PA, there are two types of rates: one is for real-estate purchases (or sales). The other would be for refinancing. Based on these factors, different rates would apply. 

Keep in mind that the cost would be further influenced by the sales price of the property and the mortgage amount.

 

1. It’s Mandatory

 

Title insurance is mandatory on real-estate purchases that have been secured by a mortgage and those that have a refinanced mortgage. However, title insurance is optional if you pay cash in full for your house. 

This is because the insurance is designed to cover either a homeowner or a mortgage lender if something goes wrong. Further, most lenders do require you to pay for the lender’s title insurance as part of the mortgage closing costs.

 

2. Its Protects

 

Title insurance is an added layer of protection that compensates for any damages or legal costs. Having this policy means there will be a payout to the policyholder if there is anything that goes wrong with the title.

It is highly recommended as a way to protect your home in the future from things that could have occurred in the past. Even things like inconsistencies in the documentation of the home and errors in the history of ownership can cause huge trouble for you if you’re not protected.

Some types of situations where this could occur are if there are any unreported liens or easements on the property if ownership rights to property have been forged (or transferred), or for unintentional errors in recording and filing of documents.

 

3. It’s a Quick Process

 

It’s a common misconception that a title search on a property will be a lengthy process. However, a title search can typically be completed in three to five business days. This duration can be lengthier in rural areas where official deeds and records can be more difficult to access. Alternatively, in more populated areas it can take as little as twenty-four hours to complete.  

 

4. It’s Essential on Foreclosed Properties

 

If you are purchasing a foreclosed property, you are definitely going to want to get title insurance for it. That’s because the chances of a defective title go up in these scenarios. But, if you have title insurance then you don’t have to worry. That’s because the insurance could end up compensating you, and in extreme circumstances, enable you to forefeet the whole property if there is something wrong.

 

5. The Cost Varies

 

The cost of a lender’s title insurance is based on the state you live in and how much money you’re borrowing for your home loan.

When it comes to homeowner’s title insurance, it tends to be more expensive when compared to a lender’s policy. This premium is further impacted by the loan size, down payment, and credit score.

It’s also important to note that title insurance is just a one-time premium. Meaning, it won’t be a recurring charge like other types of insurance.

 

6. You Can Choose

 

As a buyer, you do have a choice when it comes to selecting a title company to work with. This means it’s up to you to do your research and find a company that is trusted.

After all, it’s their responsibility to make sure that all liens and judgments against the property have been dealt with. The company is also responsible for coordinating the purchase or refinancing of the property and dealing directly with the agents, lender, and attorney. 

We understand that with so many providers, picking one can be overwhelming. That’s why it’s important to take the time to do research.

But that’s why we’re here to help. We offer personalized service and advice that can help you have a successful and stress-free sale.

For more information on how we can help, call us at 610 -549-4129 or email us at info@newdoorpt.com today

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