The average cost of title insurance is $544 for the lender's policy and $830 for the homeowner's policy, for a total cost of $1,374. We calculated this cost by collecting a number of mortgage closing cost estimates for a home in the largest state for a house with the national median value.
- How Much Does Title Insurance Cost?
- Average Cost of Lender's Title Insurance
- Average Cost of Borrower's Title Insurance
How Much Does Title Insurance Cost?
Title insurance is a legally required part of all real estate transactions, typically costing $1,374 in total for a standard residential property.
|Lender's Title Insurance||Homeowner's Title Insurance||Total|
|Bank of America||$425||$645||$1,070|
Estimates for a $200,000 home purchase in California with 20% down payment and 740 credit score
This cost is split into two types of title insurance. Homeowner's title insurance covers homeowners from losses due to past errors in property records, while lender title insurance provides the same protection to the mortgage lenders that finance most home purchases. Usually, borrowers are expected to pay for lender title insurance, while homeowner's title insurance can be paid for by either the buyer or the seller.
The location of your property is the biggest factor in determining how much you pay for title insurance, although your credit score and loan amount also play a role. Each state has different standards for the research and work that title insurers must undertake, which directly impacts the cost of their services. For lender's title insurance, anything that makes the mortgage riskier for the lender will raise the title insurance premium. This includes factors like a smaller down payment or a lower credit score from the borrower.
Average Cost of Lender's Title Insurance
Among the three major US banks, lender's title insurance averages at $544 for a California home purchase at the national median value. The premium is included in your mortgage closing costs as one of the many individual items listed in a formal loan estimate.
Since larger loans are riskier, the cost of lender's title insurance increases for bigger purchases. Wells Fargo's online estimates tended to be much more expensive than the numbers from either Chase or Bank of America. Note that our numbers apply to home purchases in California. The exact price you pay for lender's title insurance will change depending on your location, credit score and loan-to-value ratio.
Although lender's title insurance is usually cheaper than homeowner's title insurance, it's a mandatory part of every borrower's mortgage closing costs. Few people take the time to shop for a lender's title insurance policy, but you can usually choose your own title company for both lender's and homeowner's title insurance. Sometimes, title insurers will offer discounts to customers that request quotes on both types of title insurance for the same mortgage.
Average Cost of Homeowner's Title Insurance
In our analysis, the average homeowner's title insurance policy cost about $830 for a $200,000 home purchase. This policy isn't required by lenders, and in some states the seller is traditionally expected to cover the cost on the buyer's behalf.
Unlike lender's title insurance, homeowner's title insurance is an optional policy that provides you with the same coverage. Under a homeowner's title insurance policy, you're protected from damages due to any recording errors or fraud that challenge your claim to owning the property. Among the three major mortgage lenders we looked at, Bank of America's estimates for homeowner's title insurance turned out to be the most affordable at every purchase price, while Chase was the most expensive.
Our assumptions in studying these title insurance fees included a down payment of 20% and a borrower credit score of 740 on a $200,000 home purchase in California. Each of these details can significantly change how much you have to pay for homeowner's title insurance, just like they do for lender policies. It's also important to consider the past ownership of your property: a history of foreclosures, liens and other problems can make homeowner's title insurance much more important than usual.