How to calculate title insurance?
The cost of title insurance is basically dependent on the value of the property.
You can easily calculate the cost of title insurance by multiplying the rate per thousand to the purchase price of the house. The rate per thousand is provided by the insurance company.
For example, if the rate is 0.7% for every thousand and you bought the house for $200,000, then the title insurance premium would be $1,400.
There are also other insurance companies that calculate their premiums using brackets.
For example, home with a value of up to $100,000 will get 0.0575% per $1,000 (subject to a minimum of $100). Then those homes that have a value from $100,001 to $1,000,000 will get 0.055 per $1,000 and so on.
Thus, it really depends on the insurance company you want to work with. It is best to ask for a quote so that they will correctly compute the premiums for you.
When it comes to the value of the property (upon which calculations of title insurance is based), these factors often come into play:
- Location (the more in demand or upscale the location is, the higher the value of the property
- The market condition (with today's foreclosures and economic downturn, land values are cheaper as compared to during an economic boom)
Also, insurance premiums may be regulated in a particular state - the insurance company is not allowed to make any changes on the premiums, whether to increase it or to decrease it.
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