New Jersey, like many states in the nation, regulates title insurance. The Department of Banking and Insurance has "approved" a schedule of title insurance premiums as well as many of the passthrough expenses that a title company may charge a proposed insured. The total cost for title insurance can be broken down into primarily three groups: (1) the title premium, (2) pass-through expenses and (3) settlement charges.
The Title Insurance Premium
The first group is the title insurance premium itself. Use the following table to help you determine the title insurance premium on your purchase or mortgage refinance.
|$0 - $100,000||5.25 (1)||4.25 (2)||2.25 (3)|
|$100,001 - $500,000||4.00||3.25||2.00|
|$500,001 - $2,000000||2.75||2.25||1.75|
(1) $150.00 Minimum up to $28000.00
(2) $150.00 Minimum up to $35,000.00
(3) $150.00 Minimum up to $66,000.00
On a purchase transaction, use the purchase price to determine the title premium, not the mortgage amount. On a purchase transaction, you will be charged the basic rate for title insurance unless you have a copy of the seller's title policy that would then entitle you to the reissue rate. On a purchase, you will be charged either the basic rate or the reissue rate (you will never be charged the refinance rate.)
On a mortgage refinance, use the new mortgage amount to determine the tide premium, not the appraised value of your home. You will qualify for the refinance rate on the entire amount of your new loan only if your prior title policy is less than 10 years old and in an amount equal or greater to the new mortgage amount On a mortgage refinance, you will he charged either the basic rate or the refinance rate (you will never be charged the reissue rate.)
The settlement expense is, again, regulated by the New Jersey Department of Banking and Insurance. Listed in the Table below are the costs associated with the closing of your loan:
|Where & When||Settlement Cost|
|In Title Co. Office during regular business hours||$300.00|
|Out of Title office during regular business hours||$325.00|
|In Title Office outside regular business hours||$350.00|
|Out of Title office outside regular business hours||$375.00|
Basic rate is based on full purchase price of property and is used in a sales transaction. Simultaneously issued Fee/Owner's Policy is issued at $25.00
Reissue rate is a rate on a sales transaction when an issued Fee/Owner Policy of 10 years or less, is provided by the Seller to the Buyer's Title Agency at time of contract. (Commonly referred to as the Back Title Policy)
Refinance rate is a rate for a refinance transaction calculated on the current mortgage's original amount and the new loan amount. If the new loan is larger than the previous mortgage, the difference will be calculated at the basic rate.
Construction rate is coverage during the period a home is being built and only applies to the building in progress. A person purchasing a newly constructed home will pay the basic rate premium based on the final sales price.
In addition to the basic premium rate for coverage, your Lender will require additional endorsement coverage to title; 3 New Jersey searches and examinations, which are pass through costs necessary in order to issue a Title Insurance Policy.[New Jersey Title Insurance Rate Table]